International

The greenback staged a mild recovery late in yesterday’s session as investors sat on the fence, driven by risk aversion ahead of the inflation data release on Thursday. The dollar index rose to a high of 90.139 and closing at 90.127.

The euro gave away its gains showing a marginal drop ahead of the European Central Bank policy meeting on Thursday. The disappointing German industrial production numbers data release also exerted pressure on the common currency, closing the session at $1.2171 after trading a low of $1.2162.

The British pound lost momentum on the back of the greenback’s slight recovery, as uncertainty around lockdown restrictions remains a concern, It traded weaker to end the session at $1.4126, after reaching a low of $1.41119.

ZAR

The South African Rand continued to weaken on the day, falling behind its EM peers in the session, also undermining the better than expected domestic GDP print. The local unit was predominantly kept on the back foot by marginal dollar strength yesterday. The rand rose to a high of R13.3640/$ before ending the session at R13.5656/$.

South Africa’s Q1 GDP came out better than expected, printing at 4.6% QoQ Annualised compared to the market’s expectation of 2.5%. Amongst the biggest contributors to Q1 growth were increased consumption expenditure, growth in mining, finance, and business services.

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.

We are empty on the local data cards today, and internationally we have Trade data from Germany and Wholesale  Inventory data from the US. The local unit will most likely continue to track global trends and other market-moving events.

International

The dollar closed the week on the back foot as a result of a disappointing Non-Farm payrolls data print, essentially erasing the gains made from Thursday’s upbeat jobless claims data. The dollar index reached a low of 90.026 and ended the session at 90.136.

The Euro bounced off the $1.21 level yesterday, ending the day in the green as the poor US employment report assisted in the move higher. The single currency reached a high of $1.2185 and ended the day at $1.2167.

Pound Sterling benefitted from the weaker greenback as well, pulling back from below $1.4100 and re-establishing itself in the range between $1.4100 and $1.4200 that it has been in for the last month. The pound reached a high of $1.4200 and ended the day at a rate of $1.4157.

ZAR

The South African rand continued to push its lower bound further to end the week on Friday, posting new lows in the process and testing 2019’s multi-years lows on the day. Along with other riskier assets, the local unit was bolstered by surging risk appetite in global markets, on the back of the most anticipated US Jobs data on the day, which contained concerns over interest rates. The rand fell to a low of R13.4092/$ before ending the week at R13.4346/$.

Tomorrow we expect South Africa’s first-quarter GDP numbers, which according to the Reuters Poll is expected to print at -3.2% YoY and 2.6% QoQ. While according to our research team, real GDP is expected to come out at 1.7% QoQ. Today we have Net and Gross Gold & Forex Reserve data locally, and internationally we have Industrial orders in Germany and Consumer Credit data in the US.

The local unit will most likely continue to track global markets and other market-evening events on the day

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.