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 $1.3756.
The South African rand continued its winning streak on Tuesday, eyeing a R14.4000/$ 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
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