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 remained on the front foot, rallying in yesterday’s session though with reduced momentum in response to the publication of the Fed’s meeting minutes which noted growing concern and uncertainty with regards to its monetary policy. The dollar index touched a high of 92.845 to end the session at 92.644.
The euro retreated, posting additional losses at the back of reduced risk appetite. As the ECB sets out to announce the results of its revised inflation target, the euro remained under pressure throughout the day. The euro touched a low of $1.1780 to end the session at $1.1789.
Pound sterling also endured more losses, as safe haven flows favoured the US dollar over the pound and remained a dominant factor throughout intraday trading. The pound touched a low of $1.3752 and ended the session at $1.3800.
ZAR
The South African rand traded firmer within a range in yesterday’s early session, but lost momentum intraday as investors waited on the side-lines ahead of the Feds minutes, to close the session at R14.3225/$ after reaching a high of R14.4125/$.
We don’t have any local data due to be released today and internationally we are expecting jobless claims data from the US. The local unit is most likely to remain a passenger driven by global factors.
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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