The US dollar partially paired up its losses yesterday, staging a smooth recovery following a dip in its previous session. We saw the dollar index continuing to be stuck in an eight week range after hitting a high of 96.229, closing firmer on the back of the Fed’s prolonged hawkishness. Traders will look to Fed chair Jerome Powell’s nomination hearing later today for more clues to the timing and pace of monetary policy changes. In his opening remarks, Powell has pledged to rein in inflation. The index traded to a high of 96.229 before closing at 95.991. 


The shared currency closed slightly weaker against the dollar yesterday, still stuck in the same prolonged sideways pattern that we have been seeing since the end of November 2021. The divergence in monetary policy between the increasingly hawkish Fed and the accommodative ECB saw the single currency continue to trade under immense pressure, although it did manage to cap its losses on the day. We saw the euro retreating to a low of $1.1287, before ending the session at $1.1328 


The pound sterling closed weaker against the dollar, as the market continued to support the Fed’s interest rate outlook, with positioning ahead of the US CPI data also giving the dollar an edge. The market perceives the BoE and Fed to mirror each other as they move to target inflation and the pandemic. The cable traded to a high of $1.3603 before closing at $1.3579.


South Africa’s’ rand started the week on the backfoot on Monday, ending its strengthening bias on the day. We saw the local unit somewhat  struggling for direction, as global markets continue to rally behind the dollar on prospects of interest hikes and high inflation. The rand traded under pressure for the better part of the day, weakening to touch a high of 15.7386/$, before slightly consolidating to end the session at 15.6589/$.

The rand remains vulnerable to global factors as investors turn their attention  to the inflation data due from the US tomorrow, with the hope that it will lead to an increase in interest rates from the FED in the very near future.

On the data front, we have manufacturing production data due locally , and no data due on the international data cards.

Expected ranges for the day:

  • USDZAR: R15.6000/$ – R15.9000/$
  • EURUSD: $ 1.1310 – $1.1370
  • GBPUSD: $ 1.3550 – $1.3620
This communication (“this communication”) has been provided by the corporate and investment banking division of Absa Bank Limited a registered bank in the Republic of South Africa, a subsidiary of Absa Group Limited, with company registration number: 1986/004794/06 and with its registered office at: Absa Towers East, 3rd Floor, 170 Main Street, Absa Towers West, 15 Troye Street, Johannesburg 2001, Republic of South Africa (“Absa”). Absa is regulated by the South African Reserve Bank. Absa has provided this communication for information purposes only and you must not regard this as a prospectus for any security or financial product or transaction. This communication is from an Absa Sales and/or Trading desk and is not a product of the Absa Research department. This communication has not been produced, reviewed or approved by the Absa Research Department, and is not subject to any prohibition on dealing ahead of the dissemination of research. The views in this communication are not a personal recommendation and do not take into account whether any product or transaction is suitable for any particular investor. This message is subject to the terms and conditions at: This communication is confidential and no part of it may be reproduced, distributed or transmitted without the prior written permission of Absa.

Contact Details

Tel: +27 (0)21 180 4295/6/7
Cell: +27 (0)79 014 4676
Fax: +27 (0)21 930 5493

P.O. Box 6550 | Parow East
Cape Town | South Africa

Company Registration Number:  2002/031454/07

Additional Links

We are Social

Contact Form