ThinkDaily - US Inflation Moderates as Fed Considers Pause in Interest Rate Hikes, Dollar Hits Two-Month Low...

On Thursday, the rand experienced its largest gain in two months, tracking firmer global markets after a positive inflation report from the US. The Bureau of Labor Statistics reported that the producer price index (PPI) in March fell 0.5% from the previous month, which was below estimates in a Bloomberg survey. On an annual basis, the PPI rose 2.7% from a year ago, marking the smallest gain in over two years.
 

This data follows Wednesday's publication of the consumer price index report for March, which showed that headline inflation pressures eased, although core CPI remained elevated. Furthermore, the minutes of the Federal Reserve's most recent policy meeting, published on Wednesday evening, revealed that officials are concerned about the possibility of the economy entering a mild recession later this year in the aftermath of the banking crisis.
 

The Federal Open Market Committee (FOMC) minutes released on Wednesday indicated that the Fed is considering pausing interest rate hikes. This, along with a moderation in US inflation, resulted in the dollar tumbling to a two-month low against its peers.
 

The weaker dollar led to the rand strengthening to R18.05/$, its strongest level in a week. 

Source: ThinkTrader Web

The rand had strengthened 1.75% to R18.0764/$, 1.37% to R19.9588/€, and 1.58% to R22.6151/£. The euro was 0.54% firmer at $1.105. 
 

The JSE all share gained 0.93% to 78,462.77 points, led by gains in precious metals, industrials, and resources, which rose 3.1%, 1.43%, and 1.21%, respectively. The top 40 added 1.03%. 
 

The Dow Jones Industrial Average was 0.63% firmer at 33,857.19 points, while markets in Europe were also firmer. Gold gained 1.38% to $2,041.5/oz and platinum rose 3.11% to $1,046.6/oz. Brent crude was 0.46% weaker at $86.76 a barrel.


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