International

The dollar traded stronger, reaching a 3-month high as safe-haven demand continues to be a driver.  All eyes are on the US Non-Farm Payrolls data release, markets anticipate a gain of 700 000 jobs and an unemployment rate of 5.7%.  The dollar index reached a high of 92.601 and ended the session at 92.597.

The euro continued its downward trajectory after a short-lived recovery in the session, which might be a sign that the market still expects some downside pressure.  The euro reached a low of $1.1838 to end the session at $1.1846.

The pound was also on the back foot against its rivals following broad-based dollar strengthening and BOE’s governor’s sentiments, that the rise in inflation is no cause for panic but merely temporary, in the current climate where markets are still under pressure due to Covid-19. The pound reached a low of $1.3753 to end the session at $1.3764.

ZAR

A turbulent start to the second half of the year for our beloved currency, as it weakened sharply to a high of R14.4775/$ after breaching a R14.4000$ handle, as the bull-headed delta variant continues to erode sentiment globally, triggering a flight to safety.

Looking ahead, the rand is likely to remain pressured as investors are concerned about the new variant and possible extended restrictions in other countries.

Not much on the data front, locally we have business confidence and the non-farm payrolls in the U.S.

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 retreated from its previous gains ending the session on the back foot, given mixed reactions from the nonfarm payrolls figures.  US nonfarm payrolls increased by 850 000 jobs after rising by 583 000 in May and the unemployment rate rose to 5.9% from 5.8%.  The dollar index reached a high of 92.741 and ended the session at 92.226.

The euro retraced some of its earlier losses in Friday’s session against the softer dollar, post the nonfarm data release.  The euro found some reprieve taking advantage of the vulnerable dollar. The euro touched a high of $1.1874 and ended the session at $1.1864.

Despite trading under pressure due to ongoing lockdowns restrictions and Delta variant concerns in the UK, the pound also staged a recovery on the day. The pound made some moves upward on the back of the fragile dollar.  The cable reached a high of $1.3844 to end the session at $1.3821.

ZAR

The South African Rand ended the week on a good note. It staged an impressive recovery, reversing its losses from the previous session. This was on the back of disappointing Non-Farm payrolls in the U.S, boosting risk-on sentiment. The local unit managed to close off the session at R14.2575$ after reaching a low of R14.22$

Not much in the way of local data. Internationally, we have manufacturing data in Germany and U.K. The rand is most likely to follow a directive from global 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.