The rand surged to its highest in one month yesterday, while the JSE was at a two-week high, bolstered by a weakening US dollar and heightened expectations of a forthcoming US Federal Reserve Fed rate cut.
The domestic currency strengthened by 0.4 and dipped below the R18-mark to the dollar just after lunchtime, its strongest level since mid-July, though it lost some gains in the afternoon trade and moved back above the R18/1 level.
The JSE All-Share Index also surged by 1.4 to 82 533 points, a touch below the highest level of 82 765 points reached on July 31, as stocks were driven by the surge in the Standard Bank share price, Sasol, Truworths, and Absa.
Economists are anticipating a 25 basis point interest rate cut in South Africa next month, with another potential cut in November as the inflation rate eased to a six-months low of 5.1 in June, though it remains above the SA Reserve Banks target of 4.5
The monetary policy committee left its benchmark interest rate unchanged at a 14-year high of 8.25 for a seventh consecutive meeting in July as its Monetary Policy Committee is worried about the inflation outlook.
