The dollar continued to post additional gains as investors remained cautious and sought safety in the havens as the deepening financial woes of the second-largest real estate firm in China rattled markets. With trader’s positions ahead of the Fed’s meeting also aiding the dollar. The dollar index ended the session at 93.276 after reaching a high of 93.453.
The euro continued to take the strain and slowly retreated from its intraday high of $1.1736, triggered by the global sell-off in Asia which dominated markets. The euro consolidated on the downside and ended the session at $1.1725.
Pound Sterling also extended further losses, dipping sharply to lows of $1.3639 on the back of broad-based risk sell-off and as speculation is rife that the BOE may take the decision to reduce pandemic-era stimulus and begin to hike its interest rates. The pound ended the session at $1.3657 after reaching a high of $1.375.
A dwindling start to the week for the South African rand. It continued its losing streak, weighed down by the dollar rally, as investors continued to look for safety ahead of an eventful week. The local unit closed the session a tad weaker compared to its previous session at R14.7850 after reaching a high of R14.8584.
In other news, the market waits in anticipation of the monetary policy committee meeting due on Thursday and inflation data due tomorrow, for some signals. The market is expecting the policy rates to be left unchanged and a rise in CPI print.
We are thin on data for today, both on the local and international front. The rand is most likely to get direction from domestic and global upcoming key data events.
Expected ranges for the day:
- USDZAR: R14.6500/$ to R14.8500/$
- EURUSD: $1.1690 to $1.1745
- GBPUSD: $1.3600 to $1.3700
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