The U.S. dollar reclaimed its position in yesterday’s trade, on renewed positive sentiments surrounding the monetary policy stance. This was after the Feds assured the market that a high inflation debacle is temporary and there is no rush to hike interest rates. The dollar also found support from better than expected jobless claims data, coming in at 269k compared to 275k market consensus. The dollar index closed the session on a positive note at 94.347 after dipping to a low of 93.825.
The euro fell victim to a stronger dollar environment on the day, as it lost more ground in its intraday activities despite the European central bank president’s comments on keeping interest rates as low as possible, due to a low inflation environment. The single currency closed the session at $1.1552 and reached a low of $1.1530.
The pound was not spared, it was seen giving up all its gains from the previous session to hit rock bottom for the week. The bank of England caught the market by surprise and kept interest rates unchanged. The pound reached a low of $1.3472 to close the session at $1.3498.
The South African rand edged higher in its early activities yesterday, on the back of pending municipal election results. The official election results will be announced on Monday evening, while the country digests the current disappointing low figures from South Africa’s ruling party, the ANC. However, the rand managed to find some reprieve during the day and ended the session firmer, despite a stronger U.S. dollar, that rose from the Fed’s asset tapering announcement in the previous session. The rand closed at R15.2075/$, before appreciating to a low of R15.1375/$.
Today, we have Net and Gross Gold & Forex Reserves locally. Internationally, there will be various data releases from the eurozone, the U.K., and the U.S. The rand will most likely take direction from the much-anticipated election vote updates that will be fed throughout the day, as well as global events.
Expected ranges for the day:
• USDZAR: R 15.0500/$ – R15.3500/$
• EURUSD: $ 1.1500 – $1.1580
• GBPUSD: $ 1.3430 – $1.3540
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