The US dollar index traded under immense pressure against its peers yesterday. The dollar remained offered for the better part of the session, as global investors continued to digest the less than anticipated US CPI print, and its likely implications on prospects of monetary policy tapering in the near term. Although some positive data on declining import prices capped the dollar’s losses on the day, the dollar fell to a low of 92.422 before ending the session at 92.548.
The euro paused its losing streak on Wednesday, picking up some gains on the day to end the session firm. The single currency was broadly lifted on the back of a soft dollar. The euro rose to a high of $1.1831 before ending the session at $1.1818.
The pound sterling was amongst the biggest winners of the day, clawing back all of its previous day’s losses, on the back of a better than anticipated UK inflation print on the day, with broader dollar weakness also aiding the pound in its rally. The cable rose to a high of $1.3852 before ending the session at $1.3843.
The rand continued its downward trajectory post the release of disappointing retail figures, bearing testament to the devasting effects of the recent unrest, looting, and covid-19 lockdown restrictions. The rand touched a high of R14.4850/$ before closing the session at R14.4067/$.
Retail sales figures fell by 0.8% YoY in July and 11.2% MoM, signalling that the prospects of economic recovery in Q3 may be more challenging to attain.
A headliner on the economic calendar today is the release of Initial Jobless Claims figures and retail figures from the US. In addition to this, the rand will take its direction from other global factors and covid-19 news.
Expected ranges for the day:
- USDZAR: R14.3550/$ to R14.5500/$
- EURUSD: $1.1770 to $1.1830
- GBPUSD: $1.3800 to $1.3860
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