Daily Market Report 18 Sep
Will it be 25 or 50 basis points?
The above question is on everybody’s lips as the Fed will announce its interest rate decision later tonight. One thing that is clear is that there will be a cut, but the size of the cut has been a bone of contention, especially in the last couple of days. Yesterday’s better-than-expected retail figures probably caused some market players to jump ship from the 50 basis point camp to the 25 basis point camp. We do expect some market volatility after the announcement and to get the market out of the current lull it finds itself in.
Looking at the market, we have seen that the Rand has broken below R17.6000 and trading at its strongest level this year. It remains to be seen whether this level will hold and if the Rand could push a little further and test the R17.5000 level before we have the Fed announcement tonight. The US dollar is also trading a little stronger against the Euro at 1.1119, but given the significance of tonight, we expect that to change. The confluence of having a stronger Rand and stronger dollar has meant that the crosses against the Euro and Pound are looking very attractive for importers.
Why Choose TreasuryONE?
Minimise the impact of market volatility on your bottom line by getting access to an experienced team of dealers that provides expert market advice – validated by facts and figures, not feelings or hearsay.
We customise risk management strategies to achieve the most competitive rates in a fast-moving and complex marketplace.
We provide effective and measurable processes for managing:
- Exchange Rate Risk arises when an organisation conducts business in multiple currencies, either through exports and imports, or through foreign operations.
- Commodity Price Risk is the financial risk posed to an entity’s financial performance and profitability by fluctuations in commodity prices that are primarily driven by external market forces and are therefore beyond the entity’s control.
- Interest Rate Risk management for companies involves identifying, measuring, and managing the potential impact of changes in interest rates on a company’s financial position and profitability.