By the close of trade on Thursday, the South African rand strengthened against the US dollar.

  • Weak South African business confidence data was outweighed by a surprise increase in China’s April exports.  Chinese Vice Premier Liu He, a member of the Political Bureau of the Communist Party of China Central Committee and chief of the Chinese side of the China-U.S. comprehensive economic dialogue, held a phone conversation with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin on Friday morning.
  • The nation’s business confidence index deteriorated to a 35-year low in April, showing the economic impact of the first month of a nationwide lockdown aimed at curbing the spread of the coronavirus pandemic.
  • In the US, the number of people filing for unemployment benefits rose more-than-expected for the week ended 2 May 2020, as the economy went into lockdown made to battle the coronavirus pandemic.
  • 1Q20 nonfarm productivity fell by most since 2015.
  • The yield on benchmark government bonds fell yesterday. The yield on 2021 bond declined to 3.91% while that for the longer-dated 2030 issue fell to 9.43%.

In early trade on Friday, the US dollar is trading 0.4% lower against the South African rand at R18.5216, while the euro is trading 0.2% lower at R20.0974.  The British pound has declined 0.1% against the South African rand to trade at R22.9694.

By the close of trade on Thursday, the euro advanced against most of the major currencies.

  • the data front, German industrial production fell more-than-expected on a monthly basis in March. The German constitutional court has pronounced an astonishing verdict on the Bundesbank’s role in the European Central Bank’s asset purchases. The consequences are far-reaching, with implications extending well beyond the issues of monetary policy and the independence of the ECB. At stake is nothing less than the future of Europe. The ruling came a few days before the 8 May anniversary of the end of the second world war, marking the liberation of Germany and Europe from Nazi barbarism. And it coincides with fierce disputes over the effectiveness, adequacy and proportionality of measures to fight the coronavirus.
  • In the UK, The Bank of England (BoE) held the key interest rate steady at 0.1% but stated that it stands ready to take further action should the economic crisis caused by the coronavirus pandemic continue to deteriorate. The central bank expects UK gross domestic product (GDP) to shrink by 14.0% over 2020 as a whole, driven by a 25.0% decline in 2Q20.

In early trade on Friday, the euro has advanced 0.1% against the US dollar to trade at $1.0849, while it has weakened 0.2% against the British pound to trade at GBP0.8749.