Pound rallies against major cu

Pound rallies against major currencies

The GBP rallied against major currencies as investors took early results as showing Scottish voters had rejected independence from UK. Initial reports suggest that Scotland has voted 55% in favour of staying in the union and 45% backing independence.

Pound rallies against major cu

This should remove some of the uncertainty risk that had been in the markets, if the vote for independence had been confirmed.

Expecting a volatile day today, the Rand could see some major moves weaker and possibly a recovery later today. Some view the Rand as trading as high as 11.25 over the coming weeks.

The SARB left the repo rate unchanged at 5.75% following its September MPC meeting which concluded on Thursday.

The currency saw little immediate reaction to the SARB keeping rates on hold. However, the currency reacted badly to Governor Marcus confirming in the Q&A session that the September meeting would be her last as Governor. The Governor’s term ends in November. The Rand immediately weakened by 5c against the US Dollar. We believe that there are a number of internal candidates within the SARB that the markets would view as worthy successors.

The currency has remained stable overnight, which should help bonds to open slightly stronger this morning. With no local or international data to sway markets, our bias is towards a stronger bond market today.

Non-residents were net buyers of nominal SAGBs yesterday for a total of +ZAR 360 million.

The Rand recorded the largest depreciation among the EM currencies that we monitor for the purposes of our reports for a second day. The Rand depreciated by 0.46%, followed by a 0.30% depreciation in the Brazilian Real and a 0.26% depreciation in the Russian Rouble. The Indonesian Rupiah and the Turkish Lira also depreciated yesterday, by 0.11% and 0.08% respectively. In contrast, the Hungarian Forint appreciated by a significant 1.03%, with more marginal appreciations occurring in the Thai Baht (0.15%), Polish Zloty (0.14%), Indian Rupee (0.11%) and Mexican Peso (0.07%).

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