Trump accepts Republican nomination, dollar gains capped by rate cut bets
However, the dollar gains are capped as markets price in a September rate cut and a possible two further cuts this year.
Jobless claims data from Thursday, 18 July 2024, showed new claims jumping to 243k versus estimates of 229k, reinforcing the rate-cut bets.
The ECB kept rates unchanged yesterday and hinted at only one further cut this year. The DXY index has climbed back to 104.31 from yesterday's 103.70 opening as the euro has slipped to 1.0888 while the pound and yen are weaker at 1.2940 and 157.80, respectively.
The rand is weaker at R18.28 this morning, which aligns with weaker EM currencies as risk sentiment sours. The stronger dollar and fears of a broader trade war between the US and China are weighing on market sentiment.
President Ramaphosa's opening of Parliament address highlighted the GNU's commitment to inclusive growth and job creation while continuing the government's BBEE and employment equity programmes.
Gold corrects further
The prospect of a second Donald Trump presidency and the stronger dollar saw gold retreat further from its recent record run as it closed 0.6% softer at $2,445 and opened even softer at $2,425 this morning.
The prices of platinum and palladium also fell yesterday, closing 3.0% and 2.4% weaker at $968 and $930 respectively.
Base metal prices continue to slide, with copper, nickel, zinc, and aluminium in the red last night as demand concerns and high stockpiles weigh. Brent crude has opened around 0.5% softer at $84.65, while WTI is at $82.27.
About Andre Cilliers
Andre is the Currency Risk Strategist at TreasuryONE. Andre's career in treasury spans more than 30 years. He has gained his extensive currency risk experience in both the banking and corporate arena. Before joining TreasuryONE, Andre headed up the treasury department for a Tier One German international bank in South Africa.
