The US dollar index edged lower in yesterday’s session, retreating from its recent highs on the day on the back of CPI data release. The US inflation numbers printed higher, pointing to rising prices, which saw the dollar eroding two session’s worth of gains in a single drop. Given the current inflation landscape in the US, the Fed will most likely begin its tapering sooner. The dollar slipped to a low of 94.002 before ending the session at 94.080.
The single currency thrived on the dollar’s distress in yesterday’s trade, it recouped most of its losses in the week to trade stronger and closed the session at $1.1596.
The pound jumped on the bandwagon of a strengthening bias, shaking off weaker than expected GDP growth of 0.4% as opposed to 05% as per market consensus, taking bets on an ailing dollar. The pound closed the session at $1.3664.
The South African rand strengthened on Wednesday on the back of dollar weakness, as the U.S. CPI data printed above market expectation. Shortly after the release of local retail sales data, we saw the local unit losing momentum as the data missed the mark, although the market quickly shrugged off the negative data and focused on a weaker dollar. The rand strengthened to a low of R14.7900/$ before ending the session at R14.7950/$.
South African retail sales data came out at -1.3%, with the market expecting 2.6% on the day, and having printed -0.8% previously.
There is no local data on the cards today, but internationally, we are heavy on data today. There is a range of data releases from the U.S., Eurozone, and the U.K. The rand will most likely follow global trends today.
Expected ranges for the day:
- USDZAR: R 14.7500/$ – R14.9500/$
- EURUSD: $ 1.1570 – 1.1620
- GBPUSD: $ 1.3630 – 1.3700
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