International
The dollar strengthened in yesterday’s session, buoyed by safe haven demand as market participants await key data from the minutes of the latest Fed meeting and upcoming US jobless claims data. The dollar index reached a high of 92.662 and ended the session at 92.546.
The euro traded lower on the back of the stronger dollar and was further dented by a decline in German investor sentiment. The single currency retreated to a low of $1.1805 before ending the session at $1.1822.
The pound extended its gains against both the dollar and euro following announcements by the prime minister on the lifting of majority of their COVID-19 restrictions stemming from their rapid vaccine rollout. However, in late trading, the pound was not able to hold onto these gains and too ended the day in the red as a result of the stronger dollar. The pound reached a low of $1.3773, ending the session at $1.3799.
ZAR
The South African rand was tracking firmer in its early activities on Tuesday, although the local unit struggled to maintain that momentum, as the US session saw the dollar coming out of the holiday aggressively. The rand initially dipped to a low of R14.1725/$, before rising to a high of R14.4150/$ in late trade, and ultimately ended the session at 14.3775/$.
On the data front, we have Gold & Forex Reserves data due today locally, and internationally we have Industrial output data from Germany, amongst others. The local unit will most likely continue to track 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 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.
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