The dollar consolidated to the upside in yesterday’s session, finding support from positive Initial Jobless Claims, coming in at 215k compared to market expectation of 225k, which signals that the labour market is gaining momentum. The dollar was further supported by the Federal reserve’s upbeat tone in yesterday’s testimony, encouraging a 25bps hike in the Fed’s next meeting. The dollar index closed the session at 97.785 and reached a high of 97.953
The euro fell sharply on Thursday, testing a low we haven’t seen this week as geopolitical tensions continue to exert pressure on the currency. With Russia-Ukraine talks being held, there seems to be no hope that Russia will back down on its plan to continue with its invasion. The euro posted a low of $1.1016 and closed the session at $1.1030.
The sterling gave in after it showed resilience in the previous session, succumbing to pressure from a stronger dollar environment. Also, the Bank of England has reiterated its determination to hike in its 3rd consecutive meeting, despite the Russian-Ukraine debacle. The pound closed the session at $1.3345 after reaching a low of $1.3318.
The South African rand emerged victorious for a second consecutive session on Thursday. The local currency continued to ride the wave of surging commodity prices, as the Russia – Ukraine tensions continue to dominate headlines and drive markets. The rand traded under pressure early in the day, rising to a high R15.3700/$ , but managed to clawback its early losses to touch R15.1550/$ before ending the day at R15.1975/$.
On the international data cards, we have data from Germany, as well as other releases from the Eurozone and the US due this afternoon. With no data releases due locally today, we expect the rand to remain vulnerable to global market factors.
Expected ranges for the day:
- USDZAR: R15.1000/$ – R15.4600/$
- EURUSD: $ 1.0600 – $1.1120
- GBPUSD: $ 1.3270 – $1.3400