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

  • Concerns over the rising number of COVID-19 cases in the US put pressure on the greenback. The dollar index is off 6% from its recent highs, while net bets against the currency in futures markets stand near their highest level since 2018. A decline in the dollar earlier this week set off a technical formation known as a “Death Cross,” which occurs when the 50-day moving average crosses below the 200-day moving average.
  • Chinese state lenders are revamping contingency plans in anticipation of U.S. legislation that could penalise banks for serving officials who implement the new national security law for Hong Kong, sources at five state financial institutions said. image In worst-case scenarios under consideration by the Bank of China and Industrial and Commercial Bank of China, the lenders are looking at the possibility of being cut off from U.S. dollars or losing access to U.S. dollar settlements.
  • On the data front, manufacturing production plummeted on an annual basis in April, reflecting the impact of a nationwide lockdown on the recession-hit economy.
  • In the US, the number of people filing for jobless benefits dropped to a near four-month low for the week ended 4 July, as workers slowly returned to their jobs in the wake of rising coronavirus cases.
  • Meanwhile, wholesale inventories dropped in May, as the COVID-19 pandemic drove imports to near a 10-year low.
  • The yield on benchmark government bonds fell yesterday. The yield on 2026 bond fell to 7.86%. Further, the yield on 2023 bond declined to 5.01% while that for the longer-dated 2030 issue fell to 9.65%.

In early trade on Friday, the US dollar is trading 0.3% higher against the South African rand at R16.8779, while the euro is trading 0.2% higher at R19.0294.  The British pound has gained 0.1% against the South African rand to trade at R21.2469.

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

  • On the economic data front, German trade surplus widened in May.
  • Cardnet and First Data are understood to be “the final piece of the jigsaw” in securing an overall package that would provide substantial breathing space for Virgin Atlantic to continue trading through the aviation industry crisis caused by the coronavirus pandemic.  The airline was hoping to persuade the two companies to release about £200m of funds to aid its working capital as part of a broader rescue deal that in the past week has grown to over £1bn in various financing commitments.
  • High street chain Boots and department store chain John Lewis are cutting a total of more than 5,000 jobs blamed on the impact of COVID-19.

In early trade on Friday, the euro has slipped 0.1% against the US dollar to trade at $1.1274, while it has marginally gained against the British pound to trade at GBP0.8956.





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