Today’s market commentary from Andre Botha, Senior Currency Dealer at TreasuryONE
Although the Rand traded in a relatively narrow band yesterday, there was a lot of action in that band. The Rand peaked over the R13.60 fence in the morning session but once again failed to successfully scale the fence. The Rand bound trading was mainly due to the EURUSD trading in somewhat confined ranges as well yesterday.
However, we saw global equities on the front foot in evening trading yesterday, as the markets are buoyed by the possibility of a China/US trade truce, which bodes well for riskier assets like the Rand in the short term. We have seen EUR/USD opening up this morning close to the 1.1400 level, which suggests there is still momentum for the Rand to grind stronger.
While the US dollar is still the market mover at the moment, the Rand could get some of its own impetus today with the release of the third quarter GDP. Should the number print worse than 1.7%, which is the expectation, we could see the Rand lose some of its recent gains.