Market commentary by Andre Silla, currency strategist at TreasuryONE:

Rand Update

SARB raised repo rate by 50 bp and a softer dollar led to a close of 1.2% to 15.85 per day. The rand touched a better intraday level of 15.77 after the decision on the MPC before we saw that importers took advantage of a stronger rand. Currently, the local currency is at 15.82 and needs a long break at 15.75 to pave the way to the 15.50 target.

Product update

A softer dollar and improved risk-taking strengthened commodities: gold and platinum closed stronger, and palladium was slightly softer. Simple metals such as copper and nickel also showed strong gains over the day. This morning we have gold and platinum trading at 1844 and 960 dollars, and palladium rose by about 0.8% to 2024 dollars. The price of Brent remains quite high as hopes for increased demand due to China’s easing of Covid restrictions underpinned the price. Brent closed 3.5% higher at $ 112.00 and is holding on gains this morning.

International update

The DXY dollar index fell below 103.00 as US bond yields strengthened and we saw strong rebounds in the euro, pound and yen. The DXY is currently at 102.94 and the dollar is at 1.0585 against the euro, up 1.2470 against the pound and up to 127.80 against the yen. The yield on 30-year US bonds is 3.05%, the 10-year yield is 2.85%, and the 2-year yield is 2.63%. Wall Street closed weaker yesterday, but this morning their futures in the US opened stronger. Asian stock markets traded sharply higher this morning after China’s central bank cut a key 5-year interest rate on loans by a record 0.15%.

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