The dollar’s recovery was short-lived, as it was seen reverting back to its losing ways to kick start the week in yesterdays’ session. It seems the market is finally done digesting the US job’s data, living the dollar exposed and vulnerable on the day. The dollar index gave up its position, falling to a low of 95.354 before ending the session at 95.399.
Following a consolidation in its previous session, the single currency came off from the hill on Monday, giving up marginal gains. Despite inflation pressure in the region, the ECB’s President provided some sense of ease as far as tightening is concerned. Lagarde stated that, with inflation expected to subside, the is no need to act in haste. The common currency weakened to a low of $1.1418 before closing off at $1.1437.
The pound sterling had a soft start to the day, although it was seen turning the tide in its intraday activities, pushing back and ultimately capping its losses. The Fed, ECB, and the BoE are currently in the policy tightening race, with the advantage constantly shifting from one pair to another. The cable retraced from a low of $1.3492, before ending the day at $1.3535.
The rand continued to depreciate further, despite a broadly weaker dollar on the day. The decision by South Africa’s power utility to extend power cuts instead of end power cuts as promised weighed on the local currency, with the upcoming SONA also being a risk event . The rand weakened to a high of R15.5514/$ and ended the session at R15.4900/$.
The focus this week is on President Ramaphosa’s State of the Nation Address, on Thursday, 10 February 2022, where the president shares the key policy objectives and deliverables for the year ahead.
Locally we have nothing on the data front, however internationally, the US has International Trade data. The Rand will probably take direction from global events.
Expected ranges for the day:
- USDZAR: R15.4500/$ – R15.6500/$
- EURUSD: $ 1.1380 – $1.1445
- GBPUSD: $ 1.3490 – $1.3565