The Rand opened weaker against all the majors this morning.
US Fed Member Kashkari revealed that he expects “further modest reductions in our policy rate.” Kashkari also noted that recent jobs data shows a strong labour market and the economy is still on track to hit 2% inflation. These dovish remarks haven’t had a significant effect on the USD as it looks like the next interest rate cut is already priced in at 25 basis points.
Investors are focused on the UK’s CPI inflation data, set to be released tomorrow at 8:00 AM. Expectations suggest a decline to 1.9%, below the Bank of England’s target of 2.0%. If the data aligns with forecasts, the chances of the BoE cutting interest rates by 25 or 50 basis points will rise, potentially weakening the GBP.
US Fed Kugler Speech at 19:00
Todays Events:
UK Unemployment Rate at 8:00 – Expected to remain the same at 4.1%. A higher-than-expected result can be seen as negative for the GBP.
US Fed Daly Speech at 17:30
SARB Monetary Policy Review at 18:00 – The review explains current monetary policy objectives and developments. This could provide clues and clarity on future interest rate decisions for South Africa.