Today’s market commentary from Andre Botha, Senior Currency Dealer at TreasuryONE:
The Rand enjoyed a favourable day yesterday as the Rand tracked lower for most of the day, with the local unit clawing back 10 cents on the US dollar and ending the day at R14.3300. We have seen some risk-taking behaviour in the Asian session with Asian markets in the green which has filtered through in the Rand and we have seen the Rand trading at R14.2800 in morning trade. This is most likely down to a bit of Friday non-farm payroll number hangover as the mixed picture from US data has enticed the market to take on a bit of risk for higher yields.
Today is quite an important day in terms of Brexit as Theresa May conveys to Parliament her latest Brexit plan. Should her deal be accepted we could see the GBP on firmer footing and the Brexit wheel finally gaining some momentum. The opposite is true should the deal be rejected, with the odds on a second vote increasing a volatile GBP will be in the order of the day. This is the main event today and an approved deal will assist with certainty and could help the Rand stronger.
Other data out today will be the release of the US CPI which will only serve to confirm that inflation is not of massive concern in the US and the Fed is right with their wait and see approach. We expect the Rand to continue to trade within a narrow band as the market awaits new direction bearing events or data.