International

A good start to the week for the U.S dollar as it further advanced, benefitting from risk aversion triggering a flight to safety as investors remain concerned about the coronavirus impact on the global economy. The dollar index closed the session at 92.891 after reaching a high of 93.039.

The single currency steadily continued its losing streak on the back of a stronger dollar as risk appetite faded. The euro finished the day weaker at $1.1797 after reaching a low of $1.1766.

The pound ended on the back foot against its rivals as concerns surrounding the delta variant and inflation continues to weigh on the currency, especially with restrictions now being lifted in the UK. Cable closed the session at $1.3673 after reaching a low of $1.3655.

ZAR

The rand lost ground in yesterday’s session, giving back some of its gains as the dollar rallied.  A decline in risk appetite drove investors to the havens and the rand ended the day at R14.5648/$ after reaching a high of R14.6021/$

Emerging market currencies also took a dip with the rand and Turkish Lira at the front-line, leading losses as Delta variant Covid-19 cases continue to surge.

No data expected on the local front today, but a few data prints in the US and Eurozone are scheduled for release. The rand is likely to take direction from these releases while awaiting local inflation and rates decisions later this week.

his 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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