The Rand made substantial gains rallying late on Wednesday and performing admirably in early morning Thursday trade to open at ZARUSD16.91

  • In the US, consumer credit dropped on an annual basis in May, signaling that US households have been less willing to borrow to make purchases than in the past.
  • The St. Louis Fed Bank President, James Bullard, stated that unemployment in the US will likely decline to below 8.0%, maybe even 7.0%by the end of the year.   United Airlines on Wednesday said it is warning about 36,000 frontline employees — more than a third of its staff, about potential job cuts as the coronavirus pandemic continues to roil travel demand. Federal law requires employers to give staff notice about possible layoffs or temporary furloughs 60 days in advance. United and other airlines that took $25 billion in federal payroll support are prohibited from laying off, furloughing or cutting the pay rates of staff until Oct.
  • Turkey’s lira this week slipped to its weakest level since hitting a record low in early May after inflation for the month of June was reported at 12.6%, a figure that topped economists’ expectations. With rapidly shrinking foreign reserves to prop up the currency, inflation and currency devaluation are showing no signs of a turnaround
  • The yield on benchmark government bonds mostly rose yesterday. The yield on 2026 bond rose to 7.89%. Further, the yield on 2023 bond declined to 5.03% while that for the longer-dated 2030 issue rose to 9.68%.

In early trade on Thursday, the US dollar is trading marginally higher against the South African rand at R16.9425, while the euro is trading 0.2% higher at R19.2239.  The British pound has marginally gained against the South African rand to trade at R21.3672.

By the close of trade on Wednesday, the euro declined against most of the major currencies.

  • The European Central Bank (ECB) Vice President, Luis de Guindos, expressed some optimism regarding the prospects for economic growth in the region, on the back of latest auspicious data releases. He stated that the eurozone economy might have shrunk by less than the 13.0% forecast by the ECB in the three months to the end of June.
  • Meanwhile, in the UK, Finance Minister, Rishi Sunak promised an additional GBP30.00bn to head off an unemployment crisis, funneling money to employers, homebuyers and beleaguered hospitality firms to boost economic recovery.
  • Italian Finance Minister Roberto Gualtieri left open the possibility that his country will use European Stability Mechanism funds if needed to help the economy weather the fallout from the coronavirus pandemic.
  • Bank of Japan Governor Haruhiko Kuroda has maintained his cautious view that economic conditions in Japan are expected to remain severe due to the impact of the coronavirus. “Looking ahead, economic activities are expected to resume but (the) severe situation will likely continue for the time being, due to the infectious disease.

In early trade on Thursday, the euro has advanced 0.1% against the US dollar to trade at $1.1346, while it has gained 0.1% against the British pound to trade at GBP0.8997.



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