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 $1.3734.
Despite a valiant display of resilience, the rand was not able to enjoy the benefits of a weaker dollar as it continued to sell-off after a volatile session on Friday, spurred by volatility emanating from international factors, mainly persistent Evergrande insolvency concerns, and lingering US tapering threats. The Rand traded a high of R14.8387/$, 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
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