The dollar ticked higher against a basket of its peers, rising to high of 98.834 in Friday’s session buoyed by rising crude prices, a slight decline in the U Mich Sentiment data did little to dent the dollars allure. After opening the session at 98.749 the dollar index touched a low of 98.400 and ended the session relatively flat at 98.789.
The euro was on the upward trend at the start of the session and posted marginal gains but failed to maintain its traction as it struggled for direction for the better part of the session, weighed by disappointing German IFO Business Climate print of 90.8 from a prior 98.9, echoing the decline in business confidence since the start of the Russian invasion in Ukraine. The single currency touched a high of $1.1037 and ended the session at $1.0981.
The cable displayed some resilience, starting the session with an upward bias. Pound bulls failed to garner any further bullish momentum, coming under pressure from the broadly stronger dollar on the day. Market participants await further signals from BOE’s Governor’s speech for additional clues on how the bank aims to maneuver in this current challenging climate. The cable rose to a high of $1.3224 and closed the session weaker at $1.3188.
After pulling off a great performance in the week and touching levels we haven’t seen in 5 months, the South African Rand retreated to close the week marginally weaker at R14.5375/$ compared to its previous close. Following inflationary pressure concerns, subsequently to the SARB raising interest rates by 25bp on Thursday with two members favoring a 50bp move, signaling a possibility of another hike soon.
Looking ahead, we are thin on the data front both locally and internationally with nothing to write home about. We expect the rand to follow cues from global economic developments.
Expected ranges for the day:
- USDZAR: R14.4800/$ – R14.8600/$
- EURUSD: $ 1.0875 – $1.1011
- GBPUSD: $ 1.3110 – $1.3179