The Rand was unable to hold onto its gains as the week came to a close, pushing back above the R14.70/$ level as risk sentiment dulled. The Rand reached a high of R14.7368/$ and ended the session at R14.6943/$.
Weak data prints late on Friday were part of the cause in the Rands weakness as market participants grew cautious over prospects of the global economy as more evidence is released that growth is certainly not where we expected it to be at this stage.
Secondly, the upcoming Budget Speech by Finance Minister Tito Mboweni is putting a great deal of pressure on the local unit and outlined plans on how South Africa plans to deal with the various fiscal issues it is facing are key to coming out of this week on the front foot.
In terms of data releases, there are very few globally and none for South Africa expected on the day ahead and therefore global events and headlines will likely drive the Rand today, with the upcoming budget speech in the back of everyone’s minds.
The US Dollar index continued to absorb some losses on Friday as prospects of the country’s economic recovery suffered a setback on the back of weak economic data. The recovery story was really hit by rising jobless claim numbers in the US, which incited concerns over the country’s labour market, with investor appetite for risk also weighing on the dollar. The greenback fell to a low of 90.177 before ending the day at 90.364.
The euro edged higher on Friday, as the greenback continued to trade lower on the back of a struggling labour market. The single currency rose to a high of $1.2143 before ending the session at $1.2118 on the day.
Pound sterling had a good run on Friday, trading at highs last seen in April 2018. The cable took advantage of a struggling dollar, with several positive economic data in the UK also lifting the British Pound on the day. The pound rose to a high of $1.4036 before ending the session at $1.4001.
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