Cogent Treasury Solutions

FX DAILY REPORT – 21 November 2024

  • The Rand opened weaker against the USD & GBP and marginally stronger against the EUR this morning.
  • South Africa’s CPI inflation dropped significantly to 2.8%, well below the previous month’s figure. Notably, this falls outside the South African Reserve Bank’s (SARB) target range of 3-6%, placing inflation below the lower threshold.
  • The SARB is expected to cut interest rates by 25 basis points today, reducing the rate from 8.00% to 7.75%. However, given yesterday’s exceptionally low inflation figure, expectations for a 50-basis point cut have increased. A rate cut of 50 basis points will likely cause the ZAR to weaken.               

Todays Events:

 

  • South African Interest Rate Decision at 15:00 – Expected to cut by 25 basis points to 7.75%. A larger than expected rate cut can be seen as negative for the ZAR.
  • US Initial Jobless Claims at 15:30 – Expected to be 220K compared to previous weeks 217K. A higher-than-expected result can be seen as negative for the USD.
  • US Existing Home Sales at 17:00 – Expected to be 3.94M compared to previous months 3.84M. A higher-than-expected result can be seen as positive for the USD.