The US dollar edged higher during yesterday’s trading session as market risk appetite waned. Hopes of a ceasefire between Russia and Ukraine remained unrealized on the day fuelling haven demand and lifting the dollar on the day. US inflation data release brought no surprises printing in line with market expectations of 6.4% Y/Y the dollar rebounded from its previous sessions losses to rise to a high of 98.513 before ending the session at 98.5070.
The euro slipped on Thursday following a breakdown in talks between Russia and Ukraine. Although Russia remains open to dialogue with Russia, top officials from both countries failed to reach a ceasefire agreement yesterday, keeping global markets on edge. Weighed down further by the ECB’s announcement to begin tapering sooner than anticipated as well as a stronger dollar. The euro showed promise during early trading to touch a high of $1.1120 but fell to a low of $1.0983 before ending the session at $1.0986.
The pound was not left unscathed on Thursday as the Russia-Ukraine saga continues to favour the dollar. The ECB’s decision further added to the pounds woes on the day as the cable failed to build on the previous sessions gains. The pound sank to a low of $1.3092 before ending the session at $1.3097.
The rand attempted to keep its head above water, briefly touching the day’s low of R14.9935/$ but its efforts were drowned by upbeat US inflation data, tarnishing sentiment towards the local unit. The domestic current account surplus shrank more than expected to 1.9% of GDP from a prior 3.5% but persistent power cuts continue to weigh on the currency and remain a constant threat to domestic economic outlook amidst the ramped-up siege in eastern Europe. The local unit closed the session at R15.0327/$.
Global factors will be taking center stage today as we have no key local data coming out. We look forward to an array of data from the UK, US and Germany, the rand will take its direction from these events.
Expected ranges for the day:
- USDZAR: R14.9500/$ – R15.2000/$
- EURUSD: $ 1.0930 – $1.1050
- GBPUSD: $ 1.3030- $1.3130