The US dollar paused from its recent rally, prompted by promising peace talks between Russia and Ukraine which ignited hopes to an end of Russia’s prolonged invasion. A decline in the Consumer Confidence Index from a prior high of 110.50 to 107.20, also added salt to the dollar’s wounds. After opening at 99.076, the dollar index retreated to a low of 98.037, to end the session at 98.404.
The euro finally broke out, rallying to a high of $1.1136, steered by ceasefire talks, where Russia committed to trim its military operations around Ukraine’s capital and the north, and in turn, Kyiv offered to maintain grounds of neutrality. The euro rose steeply intraday and continued to register gains, although with reduced momentum, until the close of the session, ending the day firm at $1.1085.
Pound Sterling also benefitted from the market’s positive sentiment, following encouraging developments between the 2 eastern European nations. A rebound in risk appetite saw the cable post gains, touching a high of $1.3159, and trading a low of $1.3048 as it gave back some of it gains later in the afternoon, to finally end the session flat at $1.3084.
The South African rand reclaimed its position in yesterday’s trade and made up for some lost ground seen earlier in the week, following positive developments surrounding talks between Russia and Ukraine which provided stimulus for risk appetite. Russia made a commitment to remove troops from some of the affected areas in Ukraine as a gesture of goodwill. The rand appreciated to a low of R14.5000/$ to end the session at R14.5300/$.
In other news, our unemployment rate came in higher at 35.3% in Q4 21 compared to its previous print of 34.9%, although SARB data showed a strong improvement in household disposable income.
In the way of data today, we have local M3 money supply due for release. Internationally, we have ADP national employment numbers and GDP data from the U.S amongst others. The rand is most likely to follow directive on any further developments around Russia and Ukraine talks.
Expected ranges for the day:
- USDZAR: R14.4000/$ – R14.6000/$
- EURUSD: $ 1.1065 – $1.1150
- GBPUSD: $ 1.3080 – $1.3160