The US dollar index ended its losing streak yesterday, recovering from a two week low on the day, as positive economic data saved the day, with safe-haven flows also aiding the dollar. Upbeat Initial Jobless Claims data showed a decline from 293 000 to 290 000, its lowest level in 19 months. The dollar index traded a high of 93.790 and closed the session at 93.770.
The euro failed to gain any traction, trading mostly on the backfoot throughout the day as sentiment towards the common currency dissipated on the back of the stronger dollar. Eurozone Consumer Confidence indicator which fell -4.8% also added to the euro’s woes. The euro consolidated on the downside closing at $1.1621 after reaching a low of $1.1618.
Pound Sterling erased its previous gains and edged lower against the dollar in line with other majors as safe-haven demand weighed on the currency and was the predominant factor through intraday trading. The pound touched a low of $1.3774 and closed at $1.3791.
The South African rand lost momentum and weakened throughout yesterday’s session, as US upbeat economic data lifted the dollar. Furthermore, the dollar’s gains were backed up by fading risk appetite in global markets, as China’s Evergrande default concerns send fear throughout the market. Consequently, emerging market currencies were rattled by this. The rand closed at R14.6675/$ before reaching a high of R14.6946/$ and a low of R14.3686/$.
There is nothing on the local data cards today. However, we are heavy on international data, with an array of data from the Eurozone, the U.S., and the U.K. The rand will most likely take its cue from global news and trends.
Expected ranges for the day:
- USDZAR: R 14.5500/$ – R14.8500/$
- EURUSD: $ 1.1560 – 1.1700
- GBPUSD: $ 1.3760 – 1.3850
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