Markets Wrap: Strong dollar pounds rand; palladium leads commodities selloff

The rand remained on the back foot, losing more than 2% against the US dollar on Thursday following the Federal Reserve’s hawkish stance on interest rates. Other emerging market currencies like the Mexican peso and Turkish lira suffered the same fate, along with gold, platinum and palladium.

We are now trading in a fairly oversold territory in the short term and could see a dip back below the 14.00 handle,” TreasuryONE wrote in its daily markets update.

Commodities came under significant pressure with palladium leading the selloff, currently over 6% lower on the day. Platinum and copper lost 3% and 2% respectively, while gold dropped below the $1,800-level. The price of Brent Crudes remains strong, trading above the $74-mark while WTI hovers around $72.

In international currency and equity markets, the bullish dollar drove the euro down to its lowest point in two months while the pound traded back below 1.40. “The current 1.1920 mark is a significant resistance level, and a break below this level could lead to further dollar strength in the short term,” said TreasuryONE.

Equity markets too are under pressure while the US 10yr yield is up at 1.57%.

Indicators as of 17:00

USDZAR           14.0564
EURUSD           1.1936
EURZAR            16.7727
GBPUSD          1.3949
GBPZAR           19.6014
AUDZAR          10.6319
CADZAR           11.4042
CNYZAR            2.1800
ZARJPY            7.8390
CHFZAR            15.3542
USDAOA          645.53

Equities and bonds
R186                7.37%
US 10 Year       1.54%
JSE                 -0.96%
FTSE               -0.33%
S&P 500          -0.06%

Gold                $1 779.06
Plat               $1 078.65
Plad               $2 584.72
Rhod               $22 490.00
Irid                $6 090.00
Ruth                $748.00
Copp               $9 363.50
Brent               $74.05
Iron Ore 62.5% $213.53
Coal API4         $111.00
Gold ZAR         R25 011.09
Plat ZAR           R15 164.31

Indicators brought to you by TreasuryONE

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