International

The US dollar index fell to the session’s low on Tuesday during the European session, testing the 92.3300 support level once again, ahead of the much anticipated US CPI data print. Although post CPI data we saw the dollar getting lifted out of the woods, recouping all its earlier losses to end the session flat. US Core CPI (YY) inflation rose by 4.0%, which is less than the 4.2% that the market had expected. The dollar recovered from a low of 92.322 before ending the day at 92.623.

The euro had a head start in its early activities yesterday, gaining an upper hand ahead of the US data release, although we saw the single currency struggling to hold on to its gains, as the dollar made a strong comeback post the CPI data release. The euro relinquished its gains falling from a high of $1.1850 to end the session marginally weaker at $1.18080.

It was pretty much the same story for the pound, as it was for the euro, rising to a month’s high ahead of the US CPI data, and plummeting as the dollar found a few gears up, with the CPI data printing less than anticipated. The pound plunged from a high of $1.3913 before ending the session at 1.3808.

ZAR

The South African Rand was predominantly on the back foot in yesterday’s session, extending further losses in late trades as diminishing risk sentiment weighed on the currency. The rand depreciated to a high of R14.3374/$ after touching a low of R14.1194/$ and finally ended the session at R14.3192/$.

The rand has been a leading emerging market currency to date and poised for further recovery, quickly slumped following comments from the investment house JP Morgan which gave a grim outlook on the rand’s performance.

Currently, the rand remains vulnerable to international events as data on the local front is scant.  Investor focus shifts to key releases of CPI data from the US and UK respectively, we anticipate these key data releases to steer the market.

Expected ranges for the day:

• USDZAR: R14.2000/$ to R14.4000/$
• EURUSD: $1.1780 to $1.1840
• GBPUSD: $1.3780 to $1.3840

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