The Rand came back with a vengeance yesterday, but the rally was stopped short when the local unit did not have enough momentum to break through the 14.50 level. The Rand reached a low of R14.5053/$ and ended the session at R14.5938/$.
While foreigners continued to sell our government bonds, the Rand remained resilient during yesterday’s session. However, more market participants are now starting to look closely at South Africa’s internal affairs, including the rising debt crisis and this is not surprising given that Finance Minister Tito Mboweni is due to deliver his 2021 budget speech next Wednesday.
A wide range of data releases due today, most of which are PMI releases and none are local and therefore, once again, the Rand will find itself being driven by foreign events today.
Seems that the dollar recover was very much short lived with the gains from the previous 2 sessions being wiped out yesterday. Comments from US Treasury Secretary Janet Yellen yesterday reinforced the view that the US needs the $1.9trillion stimulus plan and that there is great risk in not implementing it soon enough. The dollar index reached a low of 90.541 before ending the session at 90.592.
The Euro managed to recoup some of the losses incurred on Wednesday as risk sentiment and consumer confidence in the eurozone showed a modest improvement. The single currency reached a high of $1.2095 and ended the session at $1.2092.
Pound Sterling hit fresh highs once again yesterday, stopping just short of the $1.40 handle. The pound is the best G10 currency performer this year and isn’t showing any signs of slowing as vaccine rollouts across the UK fuel optimism of rapid economic growth. The pound reached a high of $1.3986 and ended the session at $1.3975.
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