The JSE dropped marginally on Tuesday while global peers were also slightly down with the All Share Index losing 0.09% to close at 67,164 points.
Gold retreated to a nine-month low as traders flocked to the US dollar in the run-up to US inflation data due this week. The inflation data will shape the Federal Reserve’s next interest rate hike.
On the currency front, the euro hit dollar parity for the first time in almost 20 years on Tuesday with cuts to Russian gas supply in Europe heightening fears of a recession in the eurozone.
The local unit traded better on the day and broke below the R17.00/$ level during the afternoon trade. The greenback is off its best levels for the day while the euro pushed hard to gain parity.
“For now, the all-important US CPI print is due tomorrow, and the market will wait with abated breath to see what the number is. We expect the inflation data to still be elevated as some of the pullbacks in commodity prices will not feed through in this print,” comments TreasuryONE.
Crude oil lost 7% today with recession fears affecting demand supply.
“Brent Crude has given back 20% since reaching its high of $125 per barrel a month ago. This price decline could possibly lead to a decline in inflation in the coming months,” says TreasuryONE.
