The rand is feeling the pressures of an impending interest rate hike in the US
weakened this morning after the Fed hinted it may hike “interest rates at its next policy meeting,” reports Fin24
. This has heightened concerns that policy tightening in the US could “trigger capital outflows from emerging markets”.
The rand followed a number of other emerging market currencies down as traders speculate about whether December will bring an interest rate hike, says IOL
The Federal Open Market Committee’s statement
also changed its stance on concerns about volatility in global financial markets and “international economic growth,” notes BDLive
. Rob Bernstone, MD of equity trading at Credit Suisse, said it looks like the US are “less concerned with monitoring the rest of the world”.
The dollar rallied following the release of the Fed’s statement
The Fed’s statement led the dollar to hit a “two-and-a-half-month high against a basket of currencies,” says MoneyWeb
. Standard Bank’s chief trader, Warrick Butler, said emerging market currencies will pay the price “of investor sentiment and the rand will not be left untouched”.
Traders will be watching for the release of US economic growth data covering the third quarter, which is due for release later today, adds Fin24
. If the data shows the economy is growing, it backs up a rate hike in December.
At time of writing, the rand was trading at R13.77 to the dollar, R15.06 to the euro and R21.02 to the pound.
If US economic growth is strong, the bets will be on for an interest rate hike in the world’s largest economy in two months’ time.
Are you trading Forex or are you just gambling your money away?
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You may have seen the Leonardo DiCaprio film, Wolf of Wall Street.
In my favourite scene of the movie, DiCaprio’s character is having lunch with another trader played by Matthew McConaughey.
In between Martinis, McConaughey tells DiCaprio, “Only once their money’s out it’s real - we’ve got to keep it in.”
These guys know that as long as they keep the money IN the system, it’s ‘not real’ .
But, this is a very short-term attitude (not to mention immoral).
They ignored what really drives the market and they ended up losing - the firm they worked for went bankrupt within two years.
After years of gambling with a short-term focus, treating the market numbers as if they weren’t real, as if there were no products behind them, no real money… they came up short.
And, if you rely on a Forex system, it’s exactly the same - gambling on a short term focus that will leave you short.
The markets change and if you don’t focus on what really drives them you’ll lose out financially and eventually emotionally when the losses wear you down.
But, as I say, there is a solution to this problem.
A solution that may surprise you in its simplicity… Click here and I’ll show you how to stop gambling with Forex and start TRADING forex for profits.