International
The dollar strengthened against its rivals in yesterday’s session and continued to attract risk-off flows. The dollar soared to just below a 1 month high following the FED’s chair Jerome Powell’s comments that proposed stimulus tapering can commence and as jitters surrounding the heavily indebted Evergrande eased. The dollar index reached a high of 93.514 to end the session at 93.462.
The euro initially rallied at the start of the session but failed to maintain its momentum as it came under pressure from the dollar’s rally. The euro consolidated on the downside amidst a lack of economic catalysts. The euro ended the session at $1.1686 after reaching a high of $1.1755.
The pound traded weaker, falling to a 1-month low as dollar activity took centre stage on the day. The cable remains vulnerable as investors look ahead to the BOE’s interest rate decision, with market participants anticipating that its monetary policy will remain unchanged after an array of weak economic data. The pound reached a low of $1.3608 and ended the session at $1.3625.
ZAR
The rand remained resilient in yesterday’s session bolstered by global risk-on sentiment on the back of Evergrande implementing measures to get their house in order. The local unit closed the session lower at R14.7902$ after reaching a low of R14.6469$.
The South African headline inflation data came in higher than the market consensus of 4.8%. It printed a rise of 4.9% y/y in August from 4.6% in July, followed by core inflation that also came in slightly higher than consensus at 3.1% y/y in August.
Hoping for the stars to align for the rand as the market waits in anticipation for the monetary policy meeting due this afternoon, market consensus has it that rates will be kept unchanged.
We are heavy in the way of data today. Locally, we have the MPC rate decision and on the international front, we have Bank of England interest rate announcements with manufacturing data in Germany and the U.S amongst others.
Expected ranges for the day:
- USDZAR: R14.6000/$ to R14.9500/$
- EURUSD: $1.1670 to $1.1765
- GBPUSD: $1.3600 to $1.3720
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