The Rand ended the day only marginally weaker yesterday after making an attempt to break stronger once again. The Rand reached a low of R14.7746/$ before ending the session at R14.8837/$.
The R14.80/$ level proves once again that it is a tough level to break, pushing below for a brief few minutes yesterday, but turning straight back around. The Rand remained in its range as expected given that we are awaiting January Retail Sales figures as well as the US Fed Meeting today. These events will likely drive the rand through the floor or cap of its ranges, dependent on how they play out.
Power utility company, Eskom, announced yesterday that load shedding will continue through the rest of the week to Saturday but reduced to Stage 1, this will mark more than a week of consistent load shedding as Eskom struggles to build up reserves due to the loss of generation from 3 power stations as a result of scheduled maintenance as well as unexpected breakdowns. Eskom made a statement that they would continue with scheduled maintenance as per their recovery plan despite continued load shedding.
Expected ranges for the day:
- USDZAR: R14.8000 to 15.0000/$
- EURUSD: $1.1875 to $1.1945
- GBPUSD: $1.3800 to $1.3930
The US dollar index managed to realize some minor gains on Wednesday, although the greenback was predominantly trading sideways in the session, with global markets lacking some sense of conviction ahead of the Federal Reserve’s benchmark rate decision later today. According to the Reuters Poll, along with the Fed’s dovish tone over the past few weeks, they are most likely going to leave rates unchanged. Poor economic data from the US most likely weighed on dollar activities on the day, showing yet another horrible blow on the world’s largest economy and the path to recovery, although the signed stimulus bill is expected to ease the pressure. The dollar index rose to a high of 92.027 and fell to a low of 91.679 before consolidating to end the session at 91.679.
The euro continued on a losing streak for a third consecutive session yesterday as global investors are continuing to trade with caution ahead of the Fed’s meeting, with the dollar’s resilience keeping the single currency subdued on the day. The common currency fell to a low of $1.1886 before ending the session at $1.1902.
Pound Sterling showed some resilience on the day, recovering from a week’s low during the session, as some underlying COVID-19 vaccine-related risks in the UK got addressed by the European medicine watchdog, although the cable still ended the day on the back foot. The pound slipped to a low of $1.3809 before retracing most of its losses to end the session slightly flat at $1.3891.
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