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

It was a see-saw day for the U.S dollar, as the currency was seen weakening in its earlier activities induced by disappointing jobless claims, coming in higher than expected. The dollar managed to recuperate later in the day to close the session slightly firmer at 92.822 after it posted a low of 92.507.

The euro started the day firmer but lost momentum on the day, this was subsequent to the ECB leaving rates unchanged and committing to support a low-interest rate environment to bolster inflation. The common currency closed the session lower at $1.1770 after reaching a high of $1.1830.

The Pound continued to hold onto its gains from the previous session, shrugging off negative sentiments surrounding the spread of the delta variant and directing its energy to global growth prospects and inflation. The sterling closed the session at $1.3769 and after reaching a high of $1.3787.

 ZAR

The rand remained steadfast as the SARB unanimously took the decision to keep the repo rate unchanged at 3.5%. Although the local unit struggled to maintain its earlier momentum, as late trades saw the rand weakening. The MPC’s GDP forecast for 2021 also remained unchanged at 4.2%, noting that the recent unrest and the pandemic could have a lasting effect on investor confidence and economic recovery.  In addition to the MPC’s announcement, international factors also spurred volatility. The local unit see-sawed between a high of R14.7527/$ and a low of R14.5017/$, to end the session at R14.6830/$.

On the data front, we have an array of data from the US, UK, and Eurozone. The local unit will most likely continue to take its cue from 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.