International

The dollar paused its fall from grace yesterday, managing to end the day in the green after Jobless Claims and Retail Sales data prints surprised with stronger-than-expected figures, indicating that employment and growth in the US is back on track. The dollar initially weakened on the day following on momentum from the previous day, pushing the dollar index to a low of 91.493 but turned the tides in later trade. The dollar index reached a high of 91.746 before ending the session at 91.671.

The Euro suffered at the hands of the stronger dollar and upbeat US economic data, turning the tide on its strengthening trend. The Euro carried momentum from Wednesday’s session to strengthen yesterday morning and attempt to break to break through $1.20 but unfortunately was stopped short at $1.1993 before trading weaker the rest of the day. The single currency reached a low of $1.1956 and ended the session at $1.1967.

Pound Sterling managed to stay in the green yesterday, albeit only slightly. Despite the stronger greenback, the pound managed to continue its upward trend, posting a 4th consecutive day of gains this week, perhaps today it can post its 5th? The pound reached a high of $1.3809 but pulled back below $1.3800 to end the day at $1.378

ZAR

The South African rand continued to strengthen for a 4th consecutive session on Friday, with positive domestic economic data that came out during the week really helping the local unit maintain its momentum. Although the biggest contributor to yesterday’s jump, which saw the rand trading at a 14-month high, was the strong economic data that came out of the US at its open. The data really painted a good picture regarding the path to global economic recovery, which saw risk appetite increasing and EM’s rallying to their strongest levels. The local unit fell to a low of R14.1449/$ before ending the session at R14.1556/$.

In his interview with Reuters, the Governor of the Reserve Bank reiterated the SARB’s swift response to help the local economy absorb and navigate the pandemic shocks. And he further pointed out that, given the country’s current inflation outlook, which appears to be well contained, there’s room for further policy easing. The policy stance that we continue to see from bugger economies.

Today we are light on the data front, with nothing expected locally and nothing that could significantly influence the rand internationally. The local unit will most likely continue to take its cue from global trends and other market moving events.

This communication (“this communication”) has been provided by the corporate and investment banking division of Absa Bank Limited a registered bank in the Republic of South Africa, a subsidiary of Absa Group Limited, with company registration number: 1986/004794/06 and with its registered office at: Absa Towers East, 3rd Floor, 170 Main Street, Absa Towers West, 15 Troye Street, Johannesburg 2001, Republic of South Africa (“Absa”). Absa is regulated by the South African Reserve Bank. Absa has provided this communication for information purposes only and you must not regard this as a prospectus for any security or financial product or transaction. This communication is from an Absa Sales and/or Trading desk and is not a product of the Absa Research department. This communication has not been produced, reviewed or approved by the Absa Research Department, and is not subject to any prohibition on dealing ahead of the dissemination of research. The views in this communication are not a personal recommendation and do not take into account whether any product or transaction is suitable for any particular investor. This message is subject to the terms and conditions at: http://www.absa.co.za/disclaimer. This communication is confidential and no part of it may be reproduced, distributed or transmitted without the prior written permission of Absa.

International

The dollar kicked off the week to a great start as risk sentiment shifted to the cautious side due to mounting concerns over hedge fund defaults, sending investors to havens. Upbeat US economic data as well as the COVID-19 vaccine rollout across the US being on track, or possibly even ahead of schedule, aided the greenback in its surge forward, allowing the dollar index to reach a high of 92.964 and ended the session at 92.944.

The euro pulled back and reversed the gains made last Friday due to declining risk sentiment and dollar strength, while concerns over the economic impact of a third wave of COVID-19 infections, and similarly lockdown restrictions, added fuel to the fire. The single currency traded at a low of $1.1761 just before ending the session at $1.1764.

The pound continues to show its resilience and maintains its position as the best performing G10 currency for the year as it surged forward in early trade. Most of the recent gains for pound sterling can be attributed to the faster vaccine rollout across the UK, with a total of 30 million adults already vaccinated. This despite the EU trying to cause a vaccine war with the UK, with Brussels threatening to stop the export of doses to Britain.  The pound rose to a high of $1.3847, before falling to a low of $1.3756 and ended the day only marginally in the red at $1.3763.

ZAR

The rand was range-bound for the better part of the day yesterday, teetering around R15.00/$ before picking a side and recovering against the dollar, despite increased dollar demand. The rand remains sensitive to US inflation speculative views that have caused the rand’s uncertain nature. Our local unit strengthened to R14.7835/$ and ended the session at R14.9117/$.

We look forward to German inflation and US consumer confidence data out today to influence EM currency direction today.

This communication (“this communication”) has been provided by the corporate and investment banking division of Absa Bank Limited a registered bank in the Republic of South Africa, a subsidiary of Absa Group Limited, with company registration number: 1986/004794/06 and with its registered office at: Absa Towers East, 3rd Floor, 170 Main Street, Absa Towers West, 15 Troye Street, Johannesburg 2001, Republic of South Africa (“Absa”). Absa is regulated by the South African Reserve Bank. Absa has provided this communication for information purposes only and you must not regard this as a prospectus for any security or financial product or transaction. This communication is from an Absa Sales and/or Trading desk and is not a product of the Absa Research department. This communication has not been produced, reviewed or approved by the Absa Research Department, and is not subject to any prohibition on dealing ahead of the dissemination of research. The views in this communication are not a personal recommendation and do not take into account whether any product or transaction is suitable for any particular investor. This message is subject to the terms and conditions at: http://www.absa.co.za/disclaimer. This communication is confidential and no part of it may be reproduced, distributed or transmitted without the prior written permission of Absa.

Contact Details

Tel: +27 (0)21 180 4295/6/7
Cell: +27 (0)79 014 4676
Fax: +27 (0)21 930 5493
Email: info@pgforex.co.za

Address:
P.O. Box 6550 | Parow East
Cape Town | South Africa
7501

Company Registration Number:  2002/031454/07

Additional Links

We are Social

Contact Form