The dollar came off its recent highs, starting the week on a somber note as talks between Russia and Ukraine hang in the balance. In addition to the looming FED meeting, where Jerome Powell is expected to give color on the central bank’s fiscal policy and rapidly rising Covid cases in China, urged investors to proceed with caution. The dollar index fell to a low of 98.834 to close the session at 98.883.
The euro found positive sentiment and held steady yesterday as investors made room for risk appetite following dollar weakness. The common currency posted some gains and gained traction, shifting from the day’s low of $1.0929 and peaked at $1.0985 to end the session in positive territory at $1.0979.
The pound also found support, buoyed by an ailing dollar in tandem with a rebound in risk. The cable managed to hold its own, rallying to a high of $1.3079 as investors await further signals from the BoE in its upcoming policy meeting later in the week. The pound traded a low of $1.2998 and ended the session at $1.3000.
The South African rand pulled back to kick start the week yesterday, giving up the previous session’s gains on the back of retreating commodity prices, with anticipations of higher interest rates in the US also weighing on the local currency. Despite elevated geopolitical tensions in recent weeks, commodity prices rally have delivered an outstanding support for the rand, aiding it in demonstrating an unparalleled level of strength. The rand rose to high of R15.1375/$ and closed off the session at the day’s high.
Locally we are empty on data, and internationally we have an array of data across the US, EU and the US. The local unit will most likely continue to take its cue from global data and other market moving events.
Expected ranges for the day:
- USDZAR: R14.9500/$ – R15.1000/$
- EURUSD: $ 1.0906 – $1.0993
- GBPUSD: $ 1.3000 – $1.3068