The US dollar index recouped its previous day’s losses, as global markets continued to digest the Fed’s hawkish outlook, with an array of economic data on the day, also lifting the dollar out of the woods. The dollar rose against a basket of currencies, reaching a high of 96.387 before ending the day at 96.320.
The euro’s recovery was short-lived, predominantly trading sideways on Thursday and closing off the session on the back foot. With the dollar currently backed by the interest rate hike wave, the single currency is most likely going to continue feeling the squeeze. The euro slipped to a low of $1.1285 before ending the session at $1.1299.
The pound sterling came off from the hill in yesterday’s session, as the Fed’s meeting continued to underpin price actions on the day, and also extending the dollar’s reach. The cable took a breather, dipping to a low of $1.3491 before capping its losses to end the session at $1.3536.
The South African Rand’s attempt to reclaim its position after a gloomy start to the day, proved to be a success in yesterday’s session as it impressively broke below the R15.70/$ handle, posting a new low for the week. This is attributable to risk-on sentiment which was brought back to life on speculations that the local central bank might hike interest rates in the next monetary policy meeting. The rand closed the session at R15.73/$ after testing a low of R15.67$.
On the data cards today, we have local net reserves data. Internationally, all eyes on the non-farm payrolls in the U.S and industrial output in Germany amongst others. We anticipate the rand to be driven by global economic developments.
Expected ranges for the day:
- USDZAR: R15.5500/$ – R15.8500/$
- EURUSD: $ 1.1265 – $1.1340
- GBPUSD: $ 1.3490 – $1.3590