The U.S. dollar index strengthened again for the second session, despite losing some grip ahead of the economic data early in the day. The U.S. new home Sales data printed at 0.800M, surpassing market expectation by 0.04M. Similarly, consumer confidence also surpassed market expectation, and this is by 5.5 as it came out at 113.8. Furthermore, the dollar is still being nudged by the upcoming Fed’s meeting that will shed light on interest rates and U.S. asset tapering. The dollar ended the session at 93.949, before trading a high of 94.022.
The euro edged lower on Tuesday, booking some losses once again on the back of expectations that the ECB may take a dovish tone, with a stronger dollar also weighing on the single currency. The euro touched a low of $1.1583 and closed the session at $1.1595.
Following a strong start to the day, we saw a massive pull back of the pound, retreating from a high of 1.3829 to end the session flat. The pound was also seen testing the 1.3830 handle for the 4th time, although still struggling to settle above it. The cable consolidated to end the session flat at 1.3764 on the day.
The rand edged lower in yesterday’s session, dipping sharply at the start of the New York session and further extended losses towards the end of intraday trading. The local unit came under pressure on the back of a stronger US dollar in tandem with a decline in commodity prices. The rand touched a high of R14.8661/$ and closed the session at R14.8011/$.
The rand’s performance remains under threat to a variety of factors namely, a grim economic outlook, extended rolling blackouts, and lingering effects of Covid-19. As we head towards the Medium Term Budget Policy Statement, more aggressive policy intervention may be needed to help the rand stay afloat during these challenging times.
A quiet day ahead on the data front locally but internationally our US counterparts will release their Consumer Confidence index at 16:00 p.m.
Expected ranges for the day:
- USDZAR: R 14.7500/$ – R14.9500/$
- EURUSD: $ 1.1580 – 1.1630
- GBPUSD: $ 1.3710 – 1.3810
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