By the close of trade on Wednesday, the South African rand weakened against the US dollar.

  • Consumer price inflation in South Africa fell to its lowest level in eight years in October, largely impacted by declines in fuel prices.
  • In the US, mortgage applications fell for the week ended 15 November.
  • Minutes of the latest policy meeting showed that the Fed generally viewed the economic outlook as positive and policymakers were largely in agreement that the central bank won’t cut interest rates again unless economic conditions deteriorate significantly. Fed Governor, Lael Brainard, stated that she supported a pause in interest rates and monitor the US economy before making further changes to monetary policy.
  • The yield on benchmark government bonds fell yesterday. The yield on 2020 bond declined to 6.85% while that for the longer-dated 2026 issue fell to 8.31%.

In early trade on Thursday, the US dollar is trading 0.1% lower against the South African rand at R14.7703, while the euro is trading marginally lower at R16.3586.  The British pound has declined marginally against the South African rand to trade at R19.0966.

By the close of trade on Wednesday, the euro declined against most of the major currencies.

  • German producer price index (PPI) fell on a monthly basis in October.
  • The European Central Bank (ECB) stated in financial stability assessment that a largely unregulated shadow banking sector and profitability concerns among traditional lenders are among the eurozone’s biggest financial vulnerabilities.
  • ECB Chief Economist, Philip Lane, stated that the economy of the eurozone will not fall into a recession although it is growing less than expected but it is not negative.

In early trade on Thursday, the euro has marginally advanced against the US dollar to trade at $1.1075, while it has weakened marginally against the British pound to trade at GBP0.8566.

Good news today for motorists ahead of the Christmas season, as fuel prices are set to come down this evening.

Yesterday, CPI came in at 7 year lows of 3.7%, and pushed the likelihood of a 0.25% rate cut to 99% at the SARB meeting today.