We still think this Rand is going higher, and only a close below the short-term trend line will show us better levels down to 13.10’s in the short term. Today I feel we will trade 13.24 – 13.42 range.

USD/ZAR

Yesterday evening the US Federal Reserve increased US interest rates by another 0.25%, which markets were expecting. This kept the Rand tracking on the weaker short-term trend line, as it has for past few days. This interest rate increase, together with other emerging markets increasing their rates, is going to give our SARB a difficult decision, with slow growth and local prices sky rocketing, they might have to increase interest rates which will put more pressure on us locally.

European Interest Rates

As the announcement came, the rand jumped to R13.44 against the US dollar but later retraced to R13.26. The market would have been expecting quarter percent rate hike out of the US which is why the initial spike was short lived. That being said, we’re on an upward trading trend now suggesting more pain to come, especially in the short term.

Market focus now shifts to the European Central Bank (ECB) which is scheduled to announce its interest rate decision at 2pm today. Its highly expected we’ll see the ECB leave European interest rates unchanged and on hold at 0% but as always the market will look at the accompanying statements for clues suggesting policy change.

GBP/USD

The pound is trading just short of 1.3400 against the US Dollar this morning, ahead of Thursday’s London market session. The latest Brexit vote yesterday in the House of Lords is continuing to put pressure on the Brexit situation. On the downside if we break 1.33, the market will look to test 1.3204 at the first line of support before hunting recent lows of 1.3040. If we continue to track up then 1.35-1.36 sits at the top in line with the 200 Day moving average.