JSE firmer and rand steady as markets digest Fed decision

The rand kept steady below R15/$ on Thursday morning, while the JSE was on track for its second day of gains as markets digested the US Federal Reserve monetary policy decision.

After strengthening just more than 1% late on Wednesday to break below the psychological level of R15/$, boosted by global risk-on appetite after the Fed kept to the script and raised interest rates by 25 basis points.

The Fed, however, signalled six more increases by year-end on Wednesday evening, saying the US economy was strong enough to absorb the tighter monetary policy. 

Though markets had already priced in the 25-basis-point interest hike and the rand touched an intraday low of R14.8963/$ on Thursday, the local currency had weakened 0.28% to R14.9543/$ by 9.20am. It had weakened 0.34% to R16.5091/€ and 0.5% to R19.7035/£. The euro was little changed at $1.1037.

In morning trade, the yield on benchmark R2030 government securities fell 11 basis points to 9.95%. Bond yields move inversely to their prices.

The JSE all share was on track for its second day of gains after it closed 4.04% higher in the previous session, with strong gains across all sectors.

At 10.10am, the JSE all share had gained 0.92% to 74,163.01 points and the top 40 0.83%. Precious metals had added 2.15%, resources 0.94%, industrials 0.9%, financials 0.63% and industrial miners 0.32%. 

Earlier in Asia, the Shanghai Composite gained 1.41%, Hong Kong’s Hang Seng 6.27% and Japan’s Nikkei 3.46%. 

Gold gained 0.45% to $1,934.52/oz, while platinum lost 0.24% to $1,020. Brent crude rose 3.28% to $101.24 a barrel.

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