The dollar extended its losing streak in yesterday’s session as the market continued to digest the Federal Reserve’s singing of a different tune around its monetary policy stance, invigorating risk appetite. And further pressed down by disappointing manufacturing data that came in weaker than expected at 57.60 from 58.58. The dollar closed the session at 96.3850 and reached a low of 96.2350.
An impressive start to a new month for the euro, it held on to its gains from the previous session to close yesterday’s session on a high note, once again. Finding support from a weaker dollar environment and possibility of the ECB hiking rates. The single currency also found impetus from an optimistic release of German employment and manufacturing growth. The euro appreciated to a high of $1.1272 after reaching a low of $1.1222.
The pound followed suit and posted additional gains, rising higher than its peers, bolstered by positive sentiment surrounding the Bank of England’s interest rates announcement due tomorrow. The market is pricing in an increase of 25bp. The pound closed the day at $1.3526 and reached a high of $1.3528.
The South African Rand extended its winning streak and continued to strengthen for the better half of the day as risk sentiment shifted again and allowed risk assets and currencies some breathing room, taking advantage of a weaker dollar environment. The rand impressively strengthened to a low off R15.1995/$ intraday, despite slightly capping its gains as the New York trading session kicked off late afternoon. The local unit managed to remain resilient to finally end the session at R15.2578/$.
No data is expected on the cards today locally, with the only notable international release being the HICP Flash from the Eurozone. We expect the rand to continue to track offshore events, with global sentiment remaining a key driver.
Expected ranges for the day:
- USDZAR: R15.2000/$ – R15.3500/$
- EURUSD: $ 1.1220 – $1.1300
- GBPUSD: $ 1.3490 – $1.3545