Rand rallies as South Africa exits grey list

The rand strengthened on Friday, closing 0.48% higher at R17.34 against the US dollar by 18h00, following the Financial Action Task Force’s (FATF) decision to remove South Africa from its “grey list.” The country had been placed under increased monitoring in February 2023 due to deficiencies in anti–money laundering and counter-terrorist financing measures. Despite the positive currency momentum, the JSE ended the day 0.27% lower.

In the US, all three major indices notched fresh record highs as a softer-than-expected inflation report boosted hopes of Federal Reserve rate cuts later this year, driving investors into risk assets. The S&P 500 rose 0.80%, the Nasdaq gained 1%, and the Dow advanced 470 points. Annual inflation rose slightly to 3% in September from 2.90% in August below forecasts of 3.10% driven by higher energy prices, while core inflation eased to 3% from 3.10%. On a monthly basis, headline CPI rose 0.30% and core CPI 0.20%.

European equities closed marginally higher on Friday amid mixed earnings and improving growth sentiment. The STOXX 50 edged up to 5 674 and the STOXX 600 added 0.20% to a record 575, buoyed by stronger-than-expected PMI data signalling a modest recovery in activity. For the week, both benchmarks gained 1.20% and 1.60%, respectively.

In Asia, Hong Kong’s Hang Seng climbed 0.70% to 26 160, supported by gains in Shanghai shares and China’s commitment to strengthen household consumption and boost tech self-sufficiency. Japan’s Nikkei 225 jumped 1.35% to 49 299, while the Topix Index rose 0.48% to 3 269, lifted by a rally in technology and AI-related stocks following new Prime Minister Sanae Takaichi’s pledge to invest in key innovation sectors.

Brent crude traded near $66 per barrel, its highest in two weeks, on track for the best weekly performance since early June amid fresh US sanctions on major Russian oil producers. Gold steadied below $4 120 per ounce as softer US inflation data fuelled expectations of rate cuts.