The US dollar remained on the upside, to kick start the week, opening at 96.034, bolstered by rising US yields and more so the risk averse environment that persisted throughout the session. The heightened geopolitical tension on the Ukrainian border and hawkish rhetoric from the Fed, saw the dollar index test a high of 96.435 before closing the session at 96.374.
The euro continued its losing streak on the back of continued dollar demand and as investors sought safety in the havens. The shared currency depreciated to a low of $1.1278 in yesterday’s session but slightly managed to claw back some gains to test a high of $1.1368 but ultimately ended the session on the downside at $1.1349.
The pound was also a casualty to the stronger dollar as it was seen trading to a low of $1.3491 as investors proceeded with caution. Geopolitical tensions along with Brexit trade tensions continue to put the cable under pressure, although expectations of a rate hike continue to lend support to the currency. The pound traded a high of $1.3572 before closing off the session at $1.3526.
Following a minor setback on Friday, the local unit rekindled its momentum to kick start the week yesterday, scooping more gains despite a broadly stronger dollar. The local unit was seen charging forward, reigniting its strengthening bias and undermining potential geopolitical tensions, as well as hawkish prospects from the Fed. The rand strengthened to a low of R15.0836/$ before ending the session at R15.1185/$.
We continue to be empty on the local data cards for today. Although Internationally we have an array of significant data across the EU, UK, and the US. The local unit will most likely continue to track developments around geopolitical tensions and other market-moving events.
Expected ranges for the day:
- USDZAR: R14.9500/$ – R15.2000/$
- EURUSD: $ 1.1285 – $1.1345
- GBPUSD: $ 1.3500 – $1.3565