ZAR

The Rand wiped out almost all of Thursday’s gains during Friday’s session as the dollar staged a recovery against most currencies. The Rand reached a high of R15.0402/$ but managed to close the week below R15.00/$, ending the session at R14.9443/$.

After 3 solid days of strength off the back of improved risk sentiment and positive data, the Rand was unable to shake global trend and remain on its downward track. Emerging market currencies were hardest hit on Friday as sentiment subsided and haven currencies, especially the dollar picked up on the day.

The last time the Rand was at these levels about two weeks ago, it traded a full week stuck within a range so will be interesting to see how it behaves and whether we break through on top or bottom side.

On the local data front, today has nothing on the table but we are expecting Retail Sales figures for January 2021 to be release on Wednesday which are expected to print a decline for both MoM and YoY. For today, hardly any data at all internationally either and we expect the Rand to be driven by sentiment and headlines.

Expected ranges for the day:

• USDZAR: R14.8500 to 15.1500/$
• EURUSD: $1.1875 to $1.1995
• GBPUSD: $1.3850 to $1.3950

International

The US dollar index staged an aggressive recovery across the board to end the week on a high on Friday as rising US Treasury yields, resurfacing inflation concerns, and the signing in of the 1.9 trillion bill dominated market sentiment on the day. The US Treasury yields rose to levels last seen in February 2020 as the US stimulus continued to soften sentiment in global markets, improving the global economic recovery story or outlook.  The greenback rose to a high of 91.963 before ending the session at 91.679.

The Euro paused its rally on Friday, giving back half of its previous session’s gains on the back of a broadly stronger dollar. The greenback was generally better bid on the day as the yields spiked to just over a year’s high on the back of an improving recovery outlook. The single currency fell to a low of $1.1910 before ending the session at $1.1954.

Pound Sterling also fell victim to the greenback’s recovery on Friday, although the pound showed some resilience on the day as it managed to retrace almost all its losses to end the session relatively flat. The cable fell to a low of $1.3865 before consolidating most of its losses to end the day at $1.3925.

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