The dollar index closed weaker as it encountered selling-off pressure on the back of weaker than expected US job print. Traders were seen exit their long dollar positions, the move which saw the dollar undoing a week’s worth of gains. Although unemployment rate came out better than expected, the data couldn’t save the dollar on the day. The index traded to a high of 95.212 before closing at 95.719.
The common currency closed stronger against the dollar on the back of a weaker than expected US Non-Farm Payroll print on Friday. The common currency traded to a low of $1.1293 before closing at $1.1360. The ECB faces the dual threat of rising infections and rising inflation. Monetary policy divergence between ECB and Fed will continue to pressure the quote.
The pound sterling closed firmer against the dollar as it seems increasingly likely that BoE will join the Fed in entering a rate-increasing cycle. The cable traded to a low of $1.3528 before closing at $1.3598. Brexit woes continue to weigh on the quote as newly appointed Brexit Minister Liz Truss indicated that provisions exist should an agreement not be reached.
South African Rand extended its winning streak for a third consecutive session on Friday. Boosted by a softer dollar, the local currency rallied to touch a low of R15.5446$ on the back of lower than expected unemployment data from the US.
The rand was lifted further by strong commodity prices as well as the expectation that South Africa’s Reserve Bank may increase interest rates in the near future. The local currency reached a low of R15.5446/$ before ending the day stronger at R15.5875/$
On the international data cards, we have investor confidence data and unemployment data due from the Eurozone, as well as wholesale inventory numbers out of the US. We have no data due locally.
Expected ranges for the day:
- USDZAR: R15.5000/$ – R15.7500/$
- EURUSD: $ 1.1300 – $1.13401360
- GBPUSD: $ 1.3525 – $1.3600