Rand stabilises as February inflation holds at 3.20%

The South African rand remained steady on Wednesday following the release of data from the statistics agency, which revealed that the country's year-on-year inflation rate held firm in February. South Africa’s inflation rate remained unchanged at 3.20% in February 2025, the highest in four months, yet still well below the South African Reserve Bank's target midpoint of 4.50%. By 15h06 GMT, the rand was trading at 18.1325 to the dollar, just slightly lower than the previous close of 18.1350. The South African Reserve Bank is set to announce its monetary policy decision on today. Analysts polled by Reuters anticipate a rate pause, although some economists have not ruled out the possibility of an additional rate cut following Wednesday’s lower-than-expected inflation reading. On the Johannesburg Stock Exchange, the Top-40 index closed up by approximately 1.50%.

Meanwhile, U.S. stocks edged higher on Wednesday as traders awaited the Federal Reserve's (Fed) decision later in the day. The S&P 500 rose by 0.40%, the Nasdaq gained roughly 0.60%, and the Dow Jones added around 100 points, making a slight recovery after losses in the previous session. The Fed is widely expected to keep interest rates unchanged while providing updated economic projections. Tech and consumer discretionary sectors were the leading performers. On the corporate front, Tesla shares surged approximately 3.50% after receiving the first official approval from California regulators for a potential robotaxi service.

In the UK, the FTSE 100 saw a slight dip on Wednesday after five consecutive days of gains, pressured by losses in airline and mining stocks. Airlines were affected by renewed conflict in Ukraine and the collapse of the Israel-Hamas ceasefire. British Airways owner IAG fell 1.90%, easyJet dropped 1%, and Ryanair declined 1.60%. Among the FTSE 250, Wizz Air was one of the biggest losers, down by 3%. Investors are also awaiting updates on monetary policy.

In the Eurozone, stocks dropped on Wednesday, with the STOXX 50 falling by 0.40% and the STOXX 600 down by 0.30%, ending a three-session winning streak. Investors were considering Germany’s historic constitutional amendment vote, developments regarding a potential ceasefire in Ukraine, ongoing tariff concerns, and key upcoming monetary policy updates. In Germany, the Bundestag approved an amendment to the debt brake, allowing for increased fiscal spending on infrastructure and defence.

In Asia, the Japanese market saw a decline, with the Nikkei 225 Index falling by 0.25% to close at 37 752, reversing earlier gains after the Bank of Japan kept interest rates unchanged, citing uncertainty over the potential impact of US tariffs on Japan’s export-driven economy. The central bank maintained its expectations for above-potential economic growth but acknowledged signs of weakness.

In China, the Shanghai Composite fell by 0.10% to close at 3 426, while the Shenzhen Component dropped 0.32% to 10 979, with mainland stocks retreating from multi-month highs as investors took profits following a strong rally in Chinese technology and artificial intelligence-related stocks. The sector also faced pressure from renewed sell-offs in US tech giants.

In commodities, WTI crude oil futures hovered near $67 per barrel as rising US crude inventories and broader economic concerns weighed on prices, despite ongoing geopolitical tensions. Meanwhile, gold traded near $3 030 per ounce on Wednesday after briefly hitting a fresh record of $3 040 earlier in the session, driven by safe-haven demand amid rising geopolitical tensions and tariff uncertainty.