Rand claws back some lost ground as markets adjust to US Fed rates outlook
The Federal Reserve raised rates 25 basis points on Wednesday and forecast two more hikes in 2019 instead of three previously forecast
The rand staged a mild recovery on Thursday morning, signalling that market participants may have absorbed what they generally interpreted as disappointing US Federal Reserve commentary. As anticipated, the Fed raised rates by 25 basis points on Wednesday night and forecast two more increases in 2019 instead of three previously forecast. But US stock and currency markets fell in the immediate aftermath of the Fed's statement, as the perception prevailed that the world's most influential central bank did not go far enough, given the recent volatility in the global financial markets. The rand retreated from highs of R14.11/$ to lows of R14.43/$ before clawing back some lost ground. The erratic global markets are indicative of growing perceptions that the global economy could be slowing down. "Just as the [dollar] responded positively to the news, the [rand] showed some volatility during the day. Interestingly, investors have not materially reversed their vastly reduced expectations of...
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