Following a relatively indecisive session on Monday, with pressure on the downside, the US dollar continued to struggle for direction yesterday, although finally posting marginal gains. Concerns over growth prospects and the COVID-19 Delta variant in the US kept dollar moves constrained on the day. The dollar index reached a high of 92.155 before ending the session at 92.081.
The euro’s moves also continued to be range-bound on the day. Global markets are most likely waiting on the US data to get some sense of direction and conviction. The single currency initially moved higher, before retracing its marginal gains and ultimately ending the session at $1.1862.
The pound surged ahead yesterday, assisted by the latest infection numbers of COVID-19 cases across the UK. Britain has had new cases per day reduce consistently for some time now and optimism of further restrictions being lifted aided the pound. Cable reached a high $1.3939 and closed the session at $1.3916.
The rand extended further gains, hitting a fresh three-week low as dollar demand remains predominantly soft. The local unit strengthened to a low of R14.2888/$ to close the session at R14.3088/$.
Emerging market currencies continue to remain steadfast as global risk-on sentiment from COVID-19 and its effects on economic recovery continue to hog global market headlines.
An array of data both locally and internationally expected today but the largest driver of the rand will most likely continue to be risk sentiment and any changes to it.
Expected ranges for the day:
• USDZAR: R14.2500 to 14.4000/$
• EURUSD: $1.1850 to $1.1900
• GBPUSD: $1.3900 to $1.3950
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