Grapevine

By News 24
Aug 5, 2024

Rand benefits from softer dollar as Fed hints at September rate cut

In morning trading, the rand was below R18.23/$, from above R18.30 on Wednesday. It started the week at around R18.50.

The softer dollar helped keep the yen pinned near its highest since March in the wake of a hawkish pivot from the Bank of Japan.

An action-packed Wednesday started with the BOJ raising Japan rates to levels not seen in 15 years, leading to traders reassessing popular carry trades before the Fed held rates steady but put rate cuts on the table as US inflation cools.

The yen was volatile in early trade, surging nearly 1% to 148.51 per dollar, its highest since mid-March before settling at 149.95.

"BOJ normalisation and Fed cut in due course represent a shift from Fed-BOJ policy divergence to convergence," said Christopher Wong, currency strategist at OCBC.