International

The U.S. dollar index continued to sell-off to end the week on Friday, as Jerome Powell’s comments regarding the Fed’s assets purchasing strategy and interest rate saw the dollar dipping to a more than two week low. Furthermore, the Markit manufacturing PMI flash printed at 59.2, missing market expectations by -1.10, but services Markit PMI flash printed at 58.2, surpassing market expectations by 3.1. The dollar index closed the session at 93.642 after touching a low of 93.536.

The euro gained momentum on Friday on the back of dollar weakness. Although German Markit services PMI and composite PMI printed at 52.4 and 52.0, thus missing the market expectations by -2.60 and -2.0 respectively. However, the German flash PMI printed at 58.2 and surpassed market expectation by 1.70. This, along with mixed data throughout the Eurozone on Friday, did not put a dent on the currency. The euro traded a high of $1.1655 and ended the session at $1.1647.

The pound sterling weakened, despite the dollar trading on the back foot on Friday. Weak U.K retail sales data is at the root of the pound edging lower. The U.K. retail sales data printed at -1.3%, missing market expectation of -0.4% and fell -0.9%. The pound consolidated on the downside closing at $1.3751, after hitting a low of $1.3734.

ZAR

Despite a valiant display of resilience, the rand was not able to enjoy the benefits of a weaker dollar as it continued to sell-off after a volatile session on Friday, spurred by volatility emanating from international factors, mainly persistent Evergrande insolvency concerns, and lingering US tapering threats. The Rand traded a high of R14.8387/$, after strengthening to a low of R14.5572/$ and finally settled at R14.8175/$.

The Rand will take direction from global market trends and headlines today as the data card is empty locally.

Expected ranges for the day:

• USDZAR: R 14.7500/$ – R14.9500/$
• EURUSD: $ 1.1620 – 1.1680
• GBPUSD: $ 1.3750 – 1.3815

This communication (“this communication”) has been provided by the corporate and investment banking division of Absa Bank Limited a registered bank in the Republic of South Africa, a subsidiary of Absa Group Limited, with company registration number: 1986/004794/06 and with its registered office at: Absa Towers East, 3rd Floor, 170 Main Street, Absa Towers West, 15 Troye Street, Johannesburg 2001, Republic of South Africa (“Absa”). Absa is regulated by the South African Reserve Bank. Absa has provided this communication for information purposes only and you must not regard this as a prospectus for any security or financial product or transaction. This communication is from an Absa Sales and/or Trading desk and is not a product of the Absa Research department. This communication has not been produced, reviewed or approved by the Absa Research Department, and is not subject to any prohibition on dealing ahead of the dissemination of research. The views in this communication are not a personal recommendation and do not take into account whether any product or transaction is suitable for any particular investor. This message is subject to the terms and conditions at: http://www.absa.co.za/disclaimer. This communication is confidential and no part of it may be reproduced, distributed or transmitted without the prior written permission of Absa.