The dollar index traded weaker on Friday on the back of softer US Treasury yields as risk appetited waned. The dollar traded under pressure intraday as markets turn their attention to the Feds meeting on Wednesday for further indications as to when the Fed will begin increasing interest rates this year. The dollar index opened at 95.8090 and touched a high of 95.8330 before retracing its gains to end the session weaker at 95.6420.
The euro ended the week on the front foot, taking advantage of a weaker dollar and rebounded from its previous sessions losses. Lifted by better than expected Eurozone consumer confidence numbers, the common currency touched a high of 1.1358 before ending the session at 1.1344.
Weighed down by disappointing retail sales data for the month of December, the pound suffered a second successive session of losses to end the week on the backfoot, The pound failed to take advantage of a weaker dollar, sinking to a low of 1.3546 before ending the day at 1.3551.
The rand managed to hold onto its gains and tracked higher on the day, strengthening to a low of R15.0525/$ as the dollar retreated and against growing expectations of a SARB interest rate hike in its upcoming meeting. The local unit was also underpinned by the approval of a $750 million loan from the World Bank to assist the South African economy in its recovery from the devastating effects of the Corona virus pandemic. The rand ended Friday’s session at R15.0941/$ after touching a high of R15.2747/$.
We are empty on the data front locally with mostly PMI flashes from the US, the rand will most likely be driven by foreign factors.
Expected ranges for the day:
- USDZAR: R15.0000/$ – R15.2000/$
- EURUSD: $ 1.1290 – $1.1345
- GBPUSD: $ 1.3510 – $1.3580