In early morning trade, we saw the Rand touch R17.42 as the contagion effect of a stronger US dollar in evening trade on Friday still washed through the market. The Rand reacted to the US dollar, hitting 0.9879 against the Euro, which has since reversed a little bit, with the US dollar now trading at 0.9927 against the Euro. The Rand has retreated back to the R17.20 level but is not out of the woods yet as the US is out of the market today, celebrating Labour Day, and a shift in momentum could be in the order of the day when the US comes back into the market tomorrow.

Key week for the Euro

With the ECB meeting this week, this will be a key week for the Euro as we expect the ECB to hike interest rates quite aggressively. The number being touted in the market is 75 basis points which could give women support for the Euro. However, the Eurozone is facing a crisis with its energy procurement, and hiking interest rates in an already slowing economy with high inflation could quickly bring about a recession. This could mean short-term support for the Euro, but things do not look rosy for the Eurozone in the longer term. 

Oil on the front foot

Oil is up by 4% today as the OPEC countries are mulling another oil supply cut. This could lead to Brent trading above $100 per barrel in an already-contained market. We have also seen Russia stating that Nordstream 1 will be closed in the near future unless sanctions against Russia are lifted. It is easy to see that the energy market will face some tough times ahead and that volatility will echo through different markets. Other commodities are flat for the day, waiting for the US to enter the market again.