The US dollar registered another session of losses as dollar demand remained subdued on the back of increased risk appetite, which saw market participants steer away from the haven. The dollar index drifted away from its intraday high of 98.430, further weighed by US economic data on the day, with the Q4 Gross Domestic Product print downwardly revised to 6.9% from a prior 7% and softer ADP Payrolls print, sparking growing concerns of a recession. The dollar index touched a low of 97.685 and ended the session fragile at 97.792.
Momentum remained on the upside for the single currency as increased risk appetite continued to entice the palate of market participants for riskier assets. The euro rallied to a high of $1.1170, bagging additional gains throughout the session in tandem with the market’s cautious optimism of the peace talks underway. The single currency ended the day session at $1.1156.
The cable seized the opportunity to edge higher and post modest gains as the dollar eased. The cable managed to test a high of $1.3182 edging ever so slightly to the $1.3200 psychological level in yesterday’s session and remained impressively resilient as it continues to battle divergence headwinds. Pound Sterling closed the session at $1.3131.
The South African Rand posted additional gains in yesterday’s session as risk appetite remained on the front foot. The market continued to process talks between Russia and Ukraine in a positive light, lifting hopes for a peace deal. The rand appreciated to a low of R14.4350/$ to close the session at R14.4750/$.
We have a hefty line up in the way of data today. Locally, we have the PPI and trade numbers. Internationally, German retail sales on the cards and U.S jobless claims amongst others. We expect the rand to be driven by the key data releases and any economic developments that could potentially erode the market.
Expected ranges for the day:
- USDZAR: R14.4300/$ – R14.7000/$
- EURUSD: $ 1.1050 – $1.1190
- GBPUSD: $ 1.3055 – $1.3185