The dollar traded in narrow ranges in Wednesday’s session and ended on the downside as market participants awaited the FED’s policy statement. The FED finally announced an end to its bond buying program and 3 likely interest rate hikes in 2022 to curb inflation. The dollar index continued to buckle under the pressure as markets digested the FED’s moves in yesterday’s session. The dollar index closed out at 96.042 in yesterday’s session after reaching a high of 96.446.
The euro rallied in Wednesday’s session ahead of the ECB policy meeting and further extended its gains into yesterday’s session as the ECB concluded to leave its benchmark rate unchanged, and also wind down its pandemic era stimulus measures. The single currency traded a high of $1.1360 and closed the day at $1.1328.
Pound Sterling dipped sharply into the start of the American Session on Wednesday but found some reprieve as risk appetite improved. The cable was yesterday’s stellar performer, rising sharply as the BOE stunned market participants and hiked its interest rates by 25bp. The cable traded to a high of $1.3374 and closed comfortably at $1.3319
The local unit remained resilient and displayed some boldness as it juggled the FED, ECB and BOE turbulence and posted gains in Wednesday’s session, which stretched further into Thursday’s session as the major central banks settled their policies. The rand strengthened to a low of R15.8918/$ in yesterday’s session, benefitting from another cycle of risk-on flows and closed the day at R15.9343/$.
No local data is expected today to drive the Rand, and internationally we have an array of data across Europe. The local unit will most likely continue to track global events.
Expected ranges for the day:
- USDZAR: R 15.9200/$ – R15.9600/$
- EURUSD: $ 1.1332– $1.1350
- GBPUSD: $ 1.3328 – $1.3240