The dollar ticked lower and battled to forge a clear path, remaining range-bound throughout the day. Better than expected economic data failed to urge the dollar to make any additional moves. Overnight, the US imposed its first wave of targeted sanctions against Moscow in retaliation against its actions over Ukraine, slightly improving the dollar demand. The dollar index consolidated on the downside, closing out at 96.025 after trading a low of 95.841.
Euro bulls were steady yesterday as the single currency seemingly shrugged off the worsening eastern European political turmoil, breaking through the $1.1230 resistance level. The single currency benefited from the positive US and German economic data, with the latest tranches of sanctions against Russia propelling the euro to new heights. The euro traded a high of $1.1366 to end the day at $1.1325.
The pound edged lower in yesterday’s session despite a broadly weaker dollar. The cable was derailed by the BoE’s less hawkish rate hiking prospects, amid the volatile geopolitical backdrop. Risk sentiment failed to swing in the cable’s favor and drove the cable to a low of $1.3535, after trading a high of $1.3605.
Our beloved currency traded in a see-saw fashion in yesterday’s session. It was seen trading marginally weaker in its early activities as risk appetite wholly dissipated with geopolitical tensions eroding the market. Although, later it managed to make a rebound due to change of sentiment, signaling hopes that the Ukraine war will stave off, despite the deployment of troops by Russia. The local unit appreciated to a low of R15.0125$ and closed the session at R15.06$.
Looking ahead today, finance minister Enoch Godongwana will unveil the 2022 budget, the house view holds that investors would be pleased with the possible outcome for the current fiscal year, expected to come out better than market expectations.
On the data front, we expect a muted day other than the local budget speech. The rand is most likely to follow cues from the budget speech and geopolitical tension developments.
Expected ranges for the day:
- USDZAR: R14.9200/$ – R15.1500/$
- EURUSD: $ 1.1290 – $1.1365
- GBPUSD: $ 1.3560 – $1.3630