International

 The US dollar index opened slightly higher on the day, tracking firm in its early activities, although late trades saw the greenback struggling to retain its gains. The move lower, was on the back of positive US economic data, which pointed out to an improving outlook towards the economy’s path to recovery. The dollar slipped to a low of 89.893 before ending the session at 89.971.

Following a side-way session on Thursday, the single currency consolidated to end the session relatively flat. The euro edged slightly higher, as the greenback retreated midday, despite strong US data. The EU’s growth prospects, along with inflation continue to be a concern for the ECB. The euro slightly rose to a high of $1.2211 before ending the session at $1.2177

The pound sterling was one of the biggest winners against the dollar on the day, with an upward move that saw the cable recoup almost four sessions worth of losses in one day, as the pound was aided by Vlieghe’s comment on the direction of policy rates. The pound soared to a high of $1.422 before ending the session at $1.4202.

ZAR

The rand extended gains yesterday intraday, pushing to a low of R13.6780/$ as it overtook the pound and Canadian Dollar to be the best performing major currency YTD. However, it was unable to hold onto these gains and pulled back to end the day slightly in the red at a rate of R13.7736/$.

The core reason of ZAR strength over the last week or two has been bets from market participants that the US would keep rates low for a longer period of time as well a spur in demand for commodity currencies following the latest surge in commodity prices. Although, the emerging market rally halted yesterday as an uptick in US Bond yields drew investors back to government paper and other haven assets.

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No local data on the horizon anytime soon and for the day we have an array of sentiment data due for release on the data and we expect the ZAR to continue riding the global sentiment wave.

International

The US dollar index saw a significant pullback yesterday, recouping two session’s worth of losses on the day. The greenback found some reprieve on the back of the Fed’s unwavering support towards economic recovery and their view on subdued policy environment and inflation. The dollar rose to a high of 90.109 before ending the session at 90.109.

The euro opened the session firm on the day, tracking higher in its early activities, although intraday trades, along with the opening of the US session saw a drastic shift in appetite, which saw the single currency relinquishing all its earlier gains on the back of a rising dollar. With dovish remarks from the ECB’s board member also weighing on the pairs moves. The euro retreated to a low of $1.2187 before ending the session at $1.2193.

The pound sterling retreated further on the day, eyeing its latest support levels, on the back of an aggressive dollar on the day, with COVID-19 jitters also keeping the cable subdued. The British pound fell to a low of $1.4113 before ending the session at $1.4121.

ZAR

The rand has been doing a stellar job over the past few sessions, extending gains against the dollar to trade a 27-month best below the R13.80$ threshold as unappealing US returns, weighed by further comments from US Fed officials about the persistence of ultra-easy policy, boosted high-yielder sentiment. The rand was firm at R13.7394/$ on the day and closed out at R13.7492/$

Local PPI data will kick us off  on the data front today, although no significant rand movement is expected from the day’s print. We anticipate global factors to influence and drive sentiment.