A disappointing start to the week for the dollar as it failed to rebound from its downward trajectory, while market participants sit on the fence and await any changes in tone from the Fed’s chair Jerome Powell’s upcoming gathering in the next 2 days. The dollar index managed to stagger to its intraday high of 104.691, post the release of MoM US Factory Orders, which declined to -1.6%, 0.20% less than the Reuters consensus. The currency closed the session with downside pressure at 104.350.
The euro had an upbeat start as it charged forward, riding the wave of the market’s risk on trend. The single currency shrugged off lower-than-expected Eurozone Sentix Index print of -11.1 and rallied to its day’s high of $1.0694. The unit remained steadfast and continued to capitalize on an ailing dollar, to end the session in the green at $1.0678.
The pound struggled for direction throughout the session but was able to see some decent gains in its earlier activities. The cable managed to form its intra-session high of $1.2048 but its step into positive territory was short lived as risk conditions altered and foiled the unit’s attempts at bagging more gains. Pound Sterling ended the session weaker at $1.2021.
The rand enjoyed a firm start to the week as upbeat data on Friday lent further support to the local unit earlier in the day. This was short-lived intraday as the rand was perceived lacking confidence, taking a nosedive to trade in negative trajectory in anticipation of the government cabinet reshuffle. The rand was seen depreciating to a high of R18.2600$ after reaching a low of R18.1325$ on the day.
Last night, President Cyril Ramaphosa made numerous significant changes to his government, with emphasis on dealing with the country’s worsening energy crisis and enhancing governance.
On the data front, we have GDP, gold and forex reserves locally. Globally, we have China’s trade balance and BRC retail sales out of the UK. The rand is poised to take cues from important economic data scheduled for release today.
Expected ranges for the day:
- USDZAR: R18.1000/$ – R18.3500/$
- EURUSD: $1.0670 – $1.0750
- GBPUSD: $1.2020 – $1.2100