The dollar index rallied against its rivals in yesterday’s session and climbed to its intra-session high of 105.654 as risk aversion swept through the market, post the Fed’s chair hawkish comments of larger sized interest rate hikes, which reaffirmed the central bank’s commitment to rein-in surging inflation.  The dollar index ended the day leading the pack at 105.615.

EUR

The euro drifted into negative territory yesterday and plunged to a low of $1.0544, as its pursuit above the $1.0700 mark fell short, weighed by reignited dollar bulls and the market’s flight to the havens. With no further hopes of a significant recovery on the day.  The single currency surrendered and closed the day bleeding at $1.0547.

GBP 

It was a similar tale for the pound as a stronger dollar environment saw the market’s riskier assets bias fall by the wayside.  The pound’s sell-off increased sharply at the start of the American session, post the Fed’s chair unwavering stance of more aggressive rate hikes, which saw the unit tumbling to its day’s low of $1.1820, before closing the session in the red at $1.1827.

ZAR

A crippling start to the day for the local currency yesterday as investors looked for protection in safe havens as the rand continued to process the changes in the government cabinet.  The rand weakened further in the afternoon because of the negative GDP data, which came in at 1.3%, beyond the market consensus of 0.4%, as persistent power outages continue to stymie local economic growth.  The rand reached a high of R18.6425/$ and ended the session at R18.5975/$.

We lack information on the local data front on the day ahead.  We have industrial output and retail sales out of Germany on a global scale.  Additionally, The US ADP national employment.  Local and international factors are anticipated to be the main drivers of the rand.

Expected ranges for the day:

•  USDZAR:  R18.3000/$ – R18.7000/$
• EURUSD:  $1.0480 – $1.0600
• GBPUSD:  $1.1750 – $1.1900