The dollar ticked lower yesterday, following the suspension of its recent rally on the back of Friday’s poor jobs data. Despite the US having an effective vaccine rollout, giving investors hope of a quicker recovery, the pending US stimulus disbursement and ultra-easy monetary policy have investors wary of long-term investment, with the dollar gradually losing support. To add weight to matters, Bitcoin, which tends to move against the dollar, recently surged on the back of Tesla’s support, with the dollar now becoming vulnerable to the support of other crypto currencies as alternative investments as investors seek out higher returns. The dollar index traded a low 90.906, and ended the session at 90.949, just below the 91.00 psychological level.
The euro was range-bound yesterday, with expectations being for it to remain so for a while as the euro waits for direction from the dollar as it battles between strength and weakness. The single currency traded a high $1.2063 and ended the session at $1.2049.
The pound slipped midday yesterday as some Brexit conclusions with the EU have been called for refinement by the UK as certain trade agreements have negatively impacted COVID-19 supplies. Despite this, the pound remains supported as vaccine rollout and growth prospects sustain positive sentiment. The pound fell to a low $1.3680, then strengthened to $1.3747, and ended the session at $1.3740.
The rand suffered a setback yesterday, mimicking local vaccine progress as a clash between the local COVID-19 variant and vaccine type is delaying distribution. The rand treaded very closely to the R15.00/$ mark in response but managed to recoup gains to end the session little changed from where it began as optimism around a global recovery lends support. The rand weakened to R14.9970/$ and ended the session at R14.8838/$.
The rand remains largely driven by external factors, with favor stemming from dollar weakness. Despite the recent vaccine hiccup, the rand manages to find its footing amidst the chaos. With unemployment data set to be released later this week and recent lockdown restrictions having affected economic activity, we can only hope that the rand remains well bid in the aftermath to sustain current momentum. Expect global factors to influence the market today.
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