The U.S. dollar index made a recovery on Monday ahead of the much-anticipated monetary policy meeting next week, where the Fed’s is expected to give direction regarding rates. Moreover, the dollar maximized gains as the euro lost momentum later in the session yesterday. The dollar index traded a high of 93.964 and closed at 93.813.
The euro could not hold onto its gains and edged lower ahead of the ECB meetings that will be taking place on Thursday. The euro ended the session at $1.606 after touching a low of $1.1589.
The pound sterling edged slightly higher on the day despite the dollar tracking firmer on the day, concerns of COVID19, along with BREXIT. Furthermore, there is anticipation that BoE may raise interest rates soon. The pound ended the session at $1.3768 after reaching a high of $1.3791 and a low of $1.3740.
The rand breathed a sigh of relief and found some reprieve, posting marginal gains to appreciate to a low of R14.6688/$, thus kicking off the week on an upbeat note. We saw rising commodity prices coming to the local unit’s aid on the day, also lifting other commodity exporting currencies. The local unit ended the session firm at R14.7046/$.
The rand managed to shrug off concerns surrounding rolling black outs, as the national power utility announced the return of load shedding scheduled to continue into the latter part of the week.
Currently the rand remains vulnerable to global market developments as the local data card remains extremely thin with PPI and Trade balance releases later this week. Internationally we have consumer confidence data and new home sales unit in the US.
Expected ranges for the day:
- USDZAR: R 14.6000/$ – R14.8000/$
- EURUSD: $ 1.1570 – 1.1670
- GBPUSD: $ 1.3730 – 1.3820
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