The dollar index pulled off an impressive performance in yesterday’s session, touching levels we haven’t seen in more than a year, continuing to find support from rising yields as anticipation of the Fed tapering invigorates the market. Also, with investors waiting on the side-lines ahead of the inflation data released this afternoon for further clues and direction, aiding the dollar. The dollar closed the session at 94.525.
The euro remained pressured and continued to take a beating from a stronger dollar environment, as investors sought for safety in the havens amid concerns surrounding inflation and a rise in energy prices. The single currency closed the session at $1.1530 and reached a low of $1.1522.
The pound managed to trade firmer in its early activities despite disappointing employment release, but struggled to stay afloat for the latter part of the day. The cable closed the session slightly lower at $1.3589 after reaching a high of $1.3635.
The rand tracked firmer in its early activities on Tuesday ahead of local economic data that was due later in the session. However, when the mining production data was released later in the morning, the market was shaken up and the local unit was seen losing momentum, as the data came in at 2% and missing the mark by -4%. Although, we saw the rand getting lifted again, as manufacturing data printed above market expectations, coming out at 7.6% for the month of August. The local unit reached a low of R14.9049/$, before ending the session at R14.9755/$.
We have Retail Sales data on the local front today. Internationally, there is a range of data from the U.S., Eurozone, and the U.K. The rand will most likely take direction from global trends and other market moving events.
Expected ranges for the day:
- USDZAR: R 14.9000/$ – R15.1000/$
- EURUSD: $ 1.1535 – 1.1575
- GBPUSD: $ 1.3570 – 1.3640
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.