Dollar 'on the front foot' as US CPI report reveals decade high | Fin24
 
  • Credit Rating

    Moody's has (again) said that weak state-owned entities are a risk to SA's sovereign credit rating.

  • SARS Inquiry

    Judge Nugent has recommended the president sack suspended SARS boss Tom Moyane.

  • Nene Rand Rollercoaster

    Simon Brown says savvy investors worked out how the rand would react to uncertainty at Treasury.

Loading...

Dollar 'on the front foot' as US CPI report reveals decade high

Aug 10 2018 18:57
Fin24 and Bloomberg

The US dollar is likely to remain "on the front foot" alongside the biggest gain in US CPI in nearly a decade, analysts have said.

"We have seen the biggest gain in US CPI since September 2008, coming out at 2.9% y/y.

"This will keep the US dollar on the front foot, with the dollar index trading above 96.00," TreasuryONE said on Friday afternoon.

US consumer prices jumped by the most in almost a decade in July, Bloomberg reported, strengthening the case for the Federal Reserve to keep raising interest rates gradually.

On Friday, a Labor Department report showed that the core measure of the CPI – which excludes food and fuel – rose 2.4% from a year earlier, its largest increase since September 2008.

From the previous month, both the main CPI Index and the core rate rose 0.2%, in line with expectations, Bloomberg added.

'The panic has really set in now'

Meanwhile, the rand broke R14/$ for the first time in 2018 on Friday.

"USDZAR has just broken R14.00 on the back of Turkey still under massive pressure. Turkey has lost 14% on the currency today and 25% over the last week," TreasuryONE added, noting USDZAR was trading 5% weaker in the past week.

"We need to be very cautious in this market."

The rand extended its drop after US President Donald Trump announced higher tariffs on Turkish steel and aluminum imports. The move came on the heels of an address by Turkish President Recep Tayyip Erdogan that failed to reassure global markets.

"The rand has been caught up in the maelstrom," Per Hammarlund, chief emerging-market strategist at SEB SE in Stockholm, told Bloomberg.

Hammarlund predicted the currency would hit 14.50 in the short term.

* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER

Follow Fin24 on Twitter and Facebook. 24.com encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

rand  |  markets  |  currencies
NEXT ON FIN24X

 
 
 
 

Company Snapshot

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

The appointment of Tito Mboweni will:

Previous results · Suggest a vote

Loading...