International

The US Dollar edged lower in yesterday’s trade, giving away some of its gains from the previous session. This is attributable to dollar demand fading, triggered by renewed interest for riskier assets. The dollar ended the session lower at 92.754 after reaching a low of 92.726.

The euro registered gains yesterday, finding some reprieve from risk-on sentiment ahead of the ECB meeting. The single currency reached a low of $1.1752 to close off the day at $1.1792.

The pound found some breathing space and staged an impressive recovery benefitting from the weaker dollar environment, despite the uncertainty surrounding the Delta variant spread in the U.K. Pound Sterling closed the day firmer at $1.3713 after reaching a low of $1.3593.

ZAR

The rand lost its footing in intraday trading but managed to retrace its losses in the NY session, posting small gains as the dollar dipped and risk appetite improved.  The rand strengthened to a low of R14.5303/$ to close the session off at R14.5958/$.

CPI data printed 4.9% YoY in June from 5.2% in May, remaining within the SARB’s target range of 3% – 6%. Today the attention turns to the SARB’s interest rate decision, which is expected to remain unchanged at 3.5%. This will most likely not be a market mover for the ZAR today unless we have some major surprises coming out of MPC.

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.