The focus is now on the Bank of England’s policy meeting this afternoon
The rand held on to overnight gains in early trade on Thursday after the US Federal Reserve said it was in no rush to raise interest rates, even as it announced the reduction of its huge bond-buying programme, which the markets had widely anticipated.
The rand, which has been sensitive to perceptions of change in US monetary policy, recovered from R15.50/$ to R15.27/$ as Powell’s speech was interpreted as dovish. Signs of runaway inflation, driven in part by supply-chain disruptions, are turning out to be a bugbear for policymakers around the world. Central banks have an unenviable task of keeping inflation in check without choking the global economic recovery by aggressively increasing borrowing costs.
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