The US dollar traded sideways on Tuesday but managed a rebound on the day, closing out the month in positive territory as the Fed is expected to hike interest rates after the US Consumer Confidence slipped to 102.9 from January’s 106, missing the market consensus estimate of 108.5. The haven was further aided as risk aversion continued to be the theme as fears of a recession had investors unsettled. The dollar index touched a high of 105.002, before ending the month and session at 104.869.
Following the previous day’s marginal gains, the euro plummeted yesterday and was seen trading a low of $1.0575 on the day as safe-haven demand was triggered by panic of further rate hikes from the Fed. Upbeat macroeconomic data from Germany and France failed to underpin the shared currency. The euro ended the session in negative territory at $1.0575, after testing a high of $1.0642 on the day.
Pound Sterling lost its footing on the last day of February as it gave back its previous day’s gains, weighed by the fading of the positive momentum gathered from the Windsor Framework and risk-off sentiment which backed up the dollar. The cable managed to touch a high of $1.2143 intraday, to ultimately close off the session with downside pressure at $1.2020.
The South African rand remained on the backfoot in the early session, continuing with the previous session’s weaker momentum, forming an intra-session high at R18, 5171/$. On the day, the local unit managed to reverse its early session losses post the positive Q4 unemployment rate, which declined to 32.7% vs 32.9% in the prior quarter, alongside a Trade Balance deficit of R23.5bn in January. The local unit held onto its grand momentum, closing off the session in positive territory at R18.36/$.
The economic calendar remains muted on the local front, while on the international front there’s National House Prices and Consumer Credit data from the UK. CPI, Manufacturing PMI and unemployment data from the Eurozone and ISM data from the US. The rand will continue to track these global events and any changes in sentiment.
Expected ranges for the day:
- USDZAR: R18.10/$ – R18.40/$
- EURUSD: $1.0540 – $1.0620
- GBPUSD: $1.1980 – $1.2100