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

  • Front and square is the USA China Trade War!  First, White House trade adviser Peter Navarro remarked that President Trump has decided to terminate the China trade deal as intelligence officials grow increasingly confident that the coronavirus pandemic originated in a Wuhan laboratory.  Then enter President Trump an hour later on his Twitter account @THEREALDONALTRUMP saying “The China Trade Deal is fully intact. Hopefully they will continue to live up to the terms of the Agreement!”  in the last couple of hours re enter Peter Navarro, saying he was wildly taken out of context.
  • Dow Jones, S&P 500 and Nasdaq Composite futures initially turned sharply lower in morning Tuesday Asia trade as risk aversion engulfed financial markets.
  • Talks of stimulus measures in developed economies, particularly in the US continue to calm investors.   Investor fears of a second wave of coronavirus have caused “multiple cross-currents” for currencies, and demand for the US dollar may be in decline.
  • The greenback lost ground after data showed that existing home sales dropped to their lowest level in more than 9-1/2 years in May, strengthening expectations for a sharp contraction in housing market activity in 2Q20 following disruptions caused by the COVID-19 pandemic.
  • On the contrary, the Chicago Fed national activity index rebounded in May.
  • The US Dep. Of Labour [DOL] released figures for the week ending June 13, the advance figure for seasonally adjusted initial claims was 1,508,000, a decrease of 58,000 from the previous week’s revised level. The previous week’s level was revised up by 24,000 from 1,542,000 to 1,566,000. The 4-week moving average was 1,773,500, a decrease of 234,500 from the previous week’s revised average. The previous week’s average was revised up by 6,000 from 2,002,000 to 2,008,000. The advance seasonally adjusted insured unemployment rate was 14.1 percent for the week ending June 6, unchanged from the previous week’s revised rate.
  • The yield on benchmark government bonds mostly rose yesterday. The yield on 2026 bond fell to 7.62%. Further, the yield on 2023 bond advanced to 5.07% while that for the longer-dated 2030 issue rose to 9.26%.

In early trade on Tuesday, the US dollar is trading 0.1% lower against the South African rand at R17.3086, while the euro is trading marginally higher at R19.5143.  The British pound has marginally gained against the South African rand to trade at R21.6098.

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

  • The European Central Bank (ECB) Vice President, Luis de Guindos, stated that the eurozone economy might be in for more pain if measures aimed at containing the coronavirus outbreak are eased too soon.
  • On the data front, the eurozone’s consumer confidence index improved in June, as governments gradually eased lockdown restrictions imposed in March against the COVID-19 pandemic.

In early trade on Tuesday, the euro has advanced 0.1% against the US dollar to trade at $1.1274, while it has marginally weakened against the British pound to trade at GBP0.9031.

Below is a link to a very detailed Covid-19 picture giving stats and graphs.