Good morning,

On the wires…

·         KZN shooting claims 11 lives, leaves 3 injured

·         Tension flares in the DA as Gauteng leaders meet March and March on the quiet

·         Iran and US hold first talks since June after Trump’s ‘annihilation’ threat

·         US, Greenland, Denmark sign deal in bid to end Arctic standoff

·         BOK TEAM: Wiese strikes 50 as Esterhuizen leads Boks in Perth

·         AFCON QUALIFIERS: Mosimane begins new Bafana Bafana era

Quote of the day

“What would life be if we had no courage to attempt anything?” — Vincent van Gogh

The indicators

Currency crackdown…

FXOne would like to thank Nikita Govender for her contribution to the dose this morning.

The rand remained relatively steady during yesterday’s trading session. Opening at R16.25/$, as investors remained focused on both domestic economic developments and international market conditions. There were no significant movements in the currency during the day, with the rand closing marginally stronger.

Market sentiment could be influenced by expectations surrounding domestic economic data coming out today, particularly inflation figures and the SARB’s interest-rate decision. Investors will still be monitoring developments in global markets, including movements in oil prices and expectations regarding future US Federal Reserve interest-rate policy. These international factors continue to influence demand for emerging-market currencies like the rand.

Gold came under pressure yesterday, as investors continued to reassess expectations for US interest rates. The move followed growing expectations that US interest rates could remain higher for longer, which tends to reduce the attractiveness of gold because the metal does not pay interest. The stronger US dollar also contributed to the pressure on gold. Yesterday, the dollar index was slightly higher, while markets continued to price in the possibility of another Fed rate increase.

Oil prices remain another important consideration for the rand. Brent crude has been trading just below the USD100 per barrel level amid continued uncertainty surrounding developments in the Middle East and the Strait of Hormuz. Higher oil prices continue to add additional pressure on South Africa’s import bill and inflation outlook, while any sustained decline in crude prices could provide us with some relief.

The rand is likely to remain sensitive to today’s CPI release and SARB interest-rate decision, with both events capable of driving increased intraday volatility. The overriding expectation seems to be a 25bps hike, although there is a case for holding rates as well. At the same time, movements in gold, oil, the US dollar and global risk sentiment will remain important external factors influencing the currency.

On the radar…

·         ZAR – CPI

·         ZAR – Interest rate decision

·         ZAR – Heritage Day (Thursday)

·         USD – PMI

·         USD – Crude Oil Inventories

·         All – US-Iran War

Did you know?

Vilakazi Street in Soweto is the only street in the world that was home to two Nobel Peace Prize winners: Nelson Mandela and Desmond Tutu.