The US dollar continued to sell-off on Thursday, reaching lows last traded in November, as global markets further digested CPI data, along with jobless claims data on the day. With a rise in US CPI inflation MoM, and conditions in the labor market, an interest rate hike is most likely penciled in for March. The dollar index retreated further to a low of 94.660 before ending the session at 94.790.
The euro was predominantly better bid in its early activities yesterday, continuing to take advantage of a softer dollar. Although the single currency struggled to remain elevated in intraday trades, capping its gains, as risk slightly changed hands and the dollar went on to be defensive. The euro rose to a high of $1.1479, before consolidating to end the session fairly firm at $1.1453.
The Pound Sterling refused to come off the hill on Thursday, as it continued to leverage from current dollar weakness, with the BoE’s prospects on interest rates also boosting the pound further. Although, just like the euro, we saw the cable retracing some of its gains on the back of a defensive dollar and tilting risk appetite. The pound initially rose to a high of $1.3749 before ending the session at $1.3707.
South Africa’s Rand failed to build on the previous sessions winning momentum, as markets continued to digest Wednesday’s US Inflation data release. Despite having had a promising start to the day, touching a low of R15.2625$ during early trading, the local unit struggled to hold onto its gains. The rand rose to a high of R15.4400$ before ending the session on the back foot at R15.3800$
On the international data cards, we have an array of data due today, including GDP numbers from the UK and Germany, CPI data out of France as well as retail sales figures from the US amongst others. Once again, we have no data due locally.
Expected ranges for the day:
- USDZAR: R15.2600/$ – R15.4500/$
- EURUSD: $ 1.1460 – $1.1500
- GBPUSD: $ 1.3700 – $1.3750