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Rand closed firmer

On the heels of the improved global risk sentiment, the rand closed firmer at R15.84 yesterday.
Source: Pexels

Rand update

The rand had a relatively volatile day as it traded in a 20 cent range, weakening back above R16.00 at one point after the Q3 GDP number disappointed. Q3 QoQ GDP contracted by 1.5% as July's civil unrest impacted growth, while YoY GDP grew by 2.9%, below market estimates of 3.5%. This morning the rand is trading a touch weaker at R15.86, and we are likely to continue to trade in an R15.75/R16.00 range.

Commodity update

Gold and Platinum ended firmer yesterday while Palladium was flat. And Copper was weaker. This morning we have Gold up 0.27% at $1,789, Platinum and Palladium both up around 1.0% at $971 and $1,880 respectively. Brent gained 2.5% yesterday on positive Omicron vaccine news and is currently trading at $75.33, while WTI is at $71.92.

International update

Europe's Q3 GDP grew at 3.9% versus estimates of 3.7%, while the pharmaceutical company GlaxoSmithKline confirmed that their therapy is effective against the Omicron variant.

The dollar, which had closed firmer last night, is down this morning as investors take on more risk. The DXY index is lower at 96.16 from last night's 96.37, with the dollar trading at 1.1295 against the euro, at 1.3255 against the pound, and at 113.50 against the yen. The Chinese yuan is trading at 6.3530, its best level since 2018.

US Treasury yields have risen across the entire curve. Wall Street had a very strong day yesterday, with the S&P gaining 2.07%, the Nasdaq up 3.03%, and the Dow 1.4% stronger. US futures are pointing to further gains, and Asian markets are all in the green except for the Hang Seng.

The JSE closed 2.71% higher at 72,939, with all sectors up on the day.

About Andre Cilliers

Andre Cilliers, Currency Strategist at TreasuryONE
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