Today’s market commentary from Andre Botha, Senior Currency Dealer at TreasuryONE
US equities ended Friday well up after comment by Fed Chair Powell that the FED would be flexible about future monetary policy moves. This has spilt over into Asian equities that is also well up this morning. This new breath of risk-on sentiment has also given EM currencies a much-needed shot in the arm after being on the back foot for the last couple of weeks.
US non-farm payrolls surprised to the upside with over 300,000 jobs created in December which caused the Rand to hit a bit of a speed bump in the middle of the trading day. However, dovish comments by the Fed Chairman on Friday evening caused the dollar to come under further pressure and arrested all the sentiment from the good US non-farm print.
This has helped the ZAR surge below R14.00 and is currently trading at R13.93. US and Chinese officials start their trade negotiations today in the hope of finding a deal. Commodities are holding up with oil continuing its rise from recent lows. For now, we need to keep our eyes on international developments to see what will happen with our local currency.