After the potential fear that the US Fed minutes had in store, it was instead a non-event, with the rand staying around the R15.90 level after the Fed minutes. The rand traded in the same direction as its EM peers after the Fed minutes. We expect that the currency will continue to trade in a sideways fashion with the US out of the market today with the celebration of Thanksgiving, which will bring welcome relief to the EM markets. However, we still think that a run to R16.00 in the short term is a distinct possibility. The rand is currently trading at R15.8750.
After the Fed minutes, we have seen commodities staging a minor recovery after being taken to the cleaners in the last couple of days. Gold is trading at $1792, while Platinum and Palladium are trading at $988 and $1,892, respectively. Brent Crude is flat, with the commodity trading at $82.34 per barrel.
The big event last night was the US Fed minutes, and judging by how the US dollar traded, nothing in the minutes caught the markets unaware. The main concern of the Fed is inflation, as was noted by the minutes, and the Fed will raise interest rates should inflation run hot. However, the committee also stated that they should be patient with data being released. In terms of taper, some voices from the committee wanted to reduce asset purchases quicker than the $ 15 billion currently; however, the stock market seems to be calling the bluff of an aggressive Fed with stock markets trading sideways on the release of the statement. We have seen Asian Markets also shrug off the Fed minutes, with most of the Asian Markets in the green this morning. As stated earlier, we believe today will be a relatively flat day with the US out of the market.