The dollar slipped during yesterday’s trading session as the 100 mark fell out of reach following comments by US President Joe Biden that the US will be banning oil imports from Russia. Having touched a high of 99.323, the dollar retraced its early gains ,dipping to a low of 98.708 before ending the session at 99.062, weighed down by negative market sentiment.
The euro fought back from lows last seen in mid-2020 to show impressive gains and finally break its losing streak. The euro which has been left reeling in the wake of Russia and Ukraine’s’ feuding found reprieve on the back of market anticipation of increased fiscal spending in the Eurozone to aid economic recovery, and hopes of progressive dialogue between Ukraine and Russia following reports that Ukraine will not be joining NATO and ahead of the ECB’s policy meeting. The single currency ended the day at $1.0899 , having risen to a high of $1.0958 aided further by a softer dollar and better than expected German Industrial output data which came in at 2.7%.
The pound recovered ever so slightly on Tuesday posting marginal gains on the back of news that the UK would follow the US and ban oil imports from Russia. The pound was range bound for the better part of the day with the cable touching a low of $1.3079 before ending the day flat at $1.3103.
The local unit had a choppy session yesterday but managed to push through and post gains, strengthening to a low of R15.2032/$ as the market welcomed news of the latest domestic GDP print of 1.7%, in line with market’s consensus, which signaled economic growth despite intensified load shedding and the presence of the omicron variant in the 4th quarter of 2021. After opening at R15.3321/$ the rand closed the day at R15.3001/$.
Although economic outlook looks positive, the rand is not out of the woods yet as it continues to be weighed by Eskom’s woes of not having enough capacity to meet electricity demand and the ongoing conflict in eastern Europe .
The data card for the day is fairly empty both locally and internationally, the rand will most likely remain susceptible to changes in investors risk sentiment and other market moving events.
Expected ranges for the day:
- USDZAR: R15.1800/$ – R15.3800/$
- EURUSD: $ 1.0860 – $1.0960
- GBPUSD: $ 1.3075- $1.3175