Rand, JSE reverse Monday’s losses

The rand reversed some of the previous session’s losses on Tuesday, while food producers and miners helped the JSE higher, with investors awaiting key data locally and in the US.

The rand weakened almost 20c to print at a high of R19.24/$ on Monday as jitters caused markets to be more cautious given that last week’s sharp moves (which saw the rand break above R19/$) are still fresh in everyone’s memory, RMB head of forex execution Matete Thulare said.

“Tides seemed to have turned a bit today [Tuesday], with the rand trading around R19/$ suggesting Monday’s move might have been overdone,” Thulare said.

At 6.01pm, the rand had strengthened 0.76% to R19.0549/$- having touched an intraday best of R18.97.. It was 1.28% stronger at R20.6275/€ and 0.98% firmer at R24.1337/£. The euro was 0.45% weaker at $1.0834.

Investors are hopeful that a cooldown in inflation will allow the US Federal Reserve to cut interest rates several times in 2024, with the first happening as early as March. However, recent data has pushed investors to reconsider their rate-cut expectations.

According to data from CME Group, traders now see a less than 42% probability that rate cuts could begin in March, down from more than 80% a week ago, Bloomberg reported.

The US commerce department will release the fourth-quarter initial GDP estimate on Thursday. According to Bloomberg, economists expect it to show that the US economy is still growing, but at a slower pace than during the previous period.

On Friday, the December reading on the personal consumption expenditures (PCE) price index, a favourite Fed inflation gauge, is scheduled to be released. Economists polled by Bloomberg expect it to show that inflation held steady at 2.6% in December.

On the local front, inflation numbers are due on Wednesday, with RMB forecasting a print of 5.2% year on year for headline inflation. The SA Reserve Bank’s interest rate decision is scheduled for Thursday, with the general expectation it will keep rates on hold.

In the stock market, the JSE all share rose 1.36% to 73,337 points — pushed higher by gains in food producers (3.83%), precious metals and miners (3.41%), resources (2.94%) and industrial metals (2.4%). The top 40 added 1.5%.

Gold gained 0.29% to $2,027.01/oz and platinum 0.91% to $901.09/oz. Brent crude was 0.36% firmer at $80.14 a barrel.