Cogent Treasury Solutions

FX DAILY REPORT – 16 October 2024

  • The Rand opened weaker against all the majors this morning.
  • SARB Governor Lesetja noted that there were now “signs that the storm is clearing” yesterday evening at the SARB Monetary Policy Review. It was also mentioned that although the current economic outlook is optimistic, they still hold a cautious stance with regards to future interest rate decisions.
  • With the ECB’s next interest rate decision for the Eurozone scheduled for tomorrow afternoon, the current expectation is a further 25 basis point cut. Tonight, ECB President Lagarde will deliver a speech, followed by the release of the Eurozone’s CPI inflation data tomorrow morning. These events could influence expectations for the rate cut.
  • UK CPI Inflation came out lower than expected at 1.7%, this is 0.3% lower than the target inflation of 2.0%. This unexpected result re-affirms the expectation of a 25 basis point cut at the BoEs next interest rate decision and could potentially open the doors for a 50 basis point cut.

Todays Events:

 

  • UK CPI Inflation (YoY) at 8:00 – Expected to see 1.9% growth from previous months 2.2% growth. Result was 1.7% growth and caused the GBP to weaken.
  • Eurozone ECB President Lagarde Speech at 20:40 – The ECB interest rate decision is tomorrow, thus this speech from President Lagarde could provide some important clues or insights.