International

The dollar retraced some of its previous losses as the US weekly jobless claims data declined to 16-month lows, signaling that the labor market is gaining traction.  The dollar found additional support from the Fed’s chair sentiments which remained unchanged as he continued his second day of testimony.  The dollar index touched a low of 92.272 to end the day at 92.624.

Euro demand was subdued as the single currency traded broadly flat on the back of the relatively firmer dollar.  As risk aversion dominated intraday trading, the euro fell to a low of $1.1794 and ended the session at $1.1812.

The cable was little changed, trading sideways for most of the session after a short-lived rally, following hawkish comments from the BOE, which could see the tapering of current stimulus measures in place. The cable touched a low of $1.3803 to end the session at $1.3828.

ZAR

The South African rand showed some resilience in its early activities yesterday. Although the local unit struggled to hold on to its marginal gains on the day, as intraday trades, along with broader dollar strength saw the rand give away its gains to end the session on the back foot. The political unrest also continued to weigh on the rand. The local unit closed the session at R14.5570$ after reaching a high of R14.6166$

We are thin on data today, with nothing on our local calendar. Internationally, we have retail sales from the U.S, Consumer price and survey data in both the US and Euro zone, amongst others. We expect the rand to remain pressured as the political unrest continues to erode sentiment.

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.