On Monday, the rand dipped below R18.35/$ – its strongest level since mid-January amid renewed optimism that US rates may be cut, along with subsiding election fears and commodity price strength.The rand is finding some stability around stronger levels as political risk of an ANC-EFF coalition nationally is seen to have faded, said Investec's chief economist Annabel Bishop.
The dollar continued to consolidated against other major currencies on Monday as traders waited for US inflation data that could help determine whether the Federal Reserve could lower borrowing costs in 2024, and by how much. Markets are pricing in around an 80% chance of a rate cut by the Fed's September meeting, with about 40 basis points of cuts in total expected in 2024, LSEG data showed.
The market will have a chance this week, with US inflation readings in the form of the producer price index on Tuesday followed by the consumer price index on Wednesday. Treurnicht said the rand also received support from stronger commodity prices."A few commodities have increased over the last few weeks, especially copper, providing the rand and other commodity-based currencies a boost.
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