The rand did not fetch well against the dollar late on Wednesday as our domestic inflation failed to lift up the currency as the US is about to release their interest rate decision.
The rand was trading at R19.03 to the dollar at 4pm on Wednesday.
The rand on Thursday morning did have some growth and regained some value as it trades at R18.62 to the dollar.
This was mostly due to the Federal Reserve deciding to cut some of their interest rates after it had succeeded to cut inflation.
US lawmakers will continue to raise interest rates if the economy takes a downturn, according to Federal Reserve chairperson, Jerome Powell.
SA INFLATION COOLS
Casey Delport, an investment analyst at Anchor Capital said on Wednesday that SA’s inflation had cooled down in November.
Delport said that headline consumer inflation, as measured by the consumer price index (CPI), cooled to 5.5% in November from 5.9% in October, marking its first contraction since July. month-on-month, CPI declined by 0.1%.
“The decline was mainly driven by a monthly decrease of 5.5% in the fuel price index, which drove the annual rate for fuel lower to 1.8% in November from 11.2% in October,” Delport adds.
This, in turn, led to a drop in the annual rate for transport, which decreased to 4.3% from 7.4%. Core inflation (which strips out the more volatile price categories of food and energy costs) increased slightly to 4.5%, from 4.4% in October, which is notably still at the midpoint of the South African Reserve Bank’s (SARB) target range, according to Delport.
“Unfortunately for the average South African, consumer prices for food and non-alcoholic beverages accelerated to 9% - its highest level in four months”.
The recent Avian influenza outbreak continues to filter through to chicken and egg prices, disrupting the poultry market at large. Egg prices were almost 40% higher year-on-year in November, she explains.
The annual rate for individual quick-frozen (IQF) chicken was 7.3% higher in November, up from 5.5% in October. Non-IQF frozen chicken recorded an annual increase of 9.1% in November.
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