Following a short lived two day recovery, the US dollar came under immense pressure on Thursday, undoing all of its previous sessions gains, as US Treasury yields edged lower on the day on the back of demand for long dated papers. Investors continue to look out for the Fed’s timing towards Tapering. The dollar index dipped to a low of 92.380 before ending the session at 92.479.
After retreating for four consecutive sessions, the euro paused its losing streak on the day, finding support on the back of the ECB’s policy decision. The single currency staged a mild recovery, following the ECB’s decision to leave benchmark interest rates unchanged. The euro rose slightly to a high of $1.1841 before ending the session at $1.1823.
The pound sterling was amongst the biggest winners of the day against the dollar, clawing back almost three sessions worth of losses, as the dollar was broadly subdued in the session. The cable rose to a high of $1.3862 before ending the session at $1.3835.
The South African rand ended the session slightly flat on Thursday, after struggling quite a bit for direction, despite an upbeat current account data print and a broadly weaker dollar. The local unit reached a high of R14.2454/$ and a low of R14.0909/$ before ending the session at R14.1998/$.
South Africa’s current account data printed a surplus of 5.60% for the second quarter, above the market’s expectations of 4.90%.
We are empty on the local data front. Internationally we have an array of data, ranging from GDP in the UK, CPI in Germany, Industrial output in France and PPI data in the US. The local unit will most likely continue to track global events and other market moving events.
Expected ranges for the day:
- USDZAR: R14.0500/$ to R14.2000/$
- EURUSD: $1.1805 to $1.1850
- GBPUSD: $1.3830 to $1.3900
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