International

Following a very tight range in its previous session, the US dollar index edged lower yesterday, reaching a three week low ahead of  the US jobs report, the data which will most likely give the market some direction. The US dollar retreated further to a low of 92.403 against its peers, before ending the session at 90.626.

The single currency rose in its early activities, on the back of a subdued dollar, although intraday activities saw the euro pulling back from the day’s high to end the session marginally firm. The euro rose to a high of $1.1845 before ending the session at $1.1810.

Despite a relatively weaker dollar on the day, pound sterling struggled to hold on to its initial gains. The cable traded around its two week high early in the session yesterday, although late trades saw the pound succumbing to some form of pressure and  ultimately giving up all its gains to end the session on the back foot. The cable retreated from a high of $1.3807 before ending the session weaker at $1.3756.

ZAR

The South African rand continued its winning streak on Tuesday, eyeing a R14.4000/$ handle in the session. Reduced risk aversion in global markets continues to create a leeway for riskier assets to make up lost ground and see some solid flows. The local unit firmed, reaching a low of R14.4500/$ before ending the session at R14.5375/$ on the day.

Trade balance data came out below market expectations yesterday, printing 36.96 billion vs 57.68 billion in June, with the market expecting 45 billion. The private sector credit extension data came out at 0.61% vs -0.54%  in June, with the market expecting -0.70%.

Locally we are empty on data today. Internationally, we have an array of data from Germany, France, Italy, Europe, UK and the US. The local unit will most likely continue to follow global trends and other market moving events.

Expected ranges for the day:

• USDZAR: R14.4000/$ to 14.6000/$
• EURUSD: $1.1760 to $1.1830
• GBPUSD: $1.3700 to $1.3760

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.