The dollar retraced its previous losses, gathering some sizable gains and hovering near a one year high as taper talks continued to flip global markets between risk on and risk off flows on a daily basis. The dollar index rose to a high of 93.991 and ended the session at 93.990.
Following a short lived recovery, the euro ticked lower on the day, as the dollar remained better bid for the better part of the session, which saw the single currency unwinding its previous gains. The single currency retreated to a low of $1.1579 before ending the session at $1.1596.
The pound rallied against both the dollar and euro, buoyed by upbeat UK PMI data which signalled general growth for businesses, hinting that economic recovery post lockdown measures is gaining traction. The pound reached a high of $1.3647 and ended the session at $1.3629.
The South African rand was tracking firm in its early activities yesterday, although we saw it struggling to hold on to its gains, as the US session came in, and the dollar strengthened ahead of the US jobs data. Even though risk sentiment waned during intraday trading, the rand managed find its footing, clawing back some gains after SARB’s Monetary Policy Review. The Reserve Bank Governor highlighted inflation risks and reiterated that necessary measures will be taken if such risks transpire. The local unit strengthened to a low of R14.9485/$ after touching the R15.1076/$ handle and finally ended the session at R14.9884/$
Data on the local front remains thin, we anticipate the rand will take its direction from offshore events.
Expected ranges for the day:
- USDZAR: R14.9000/$ – R15.1800/$
- EURUSD: $1.1550 – 1.1630
- GBPUSD: $1.3550 – 1.3660
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