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

  • Investors continued to monitor simmering geopolitical tensions and rising COVID-19 cases.
  • U.S. President Donald Trump has held a news conference on Tuesday with regards to Hong Kong and China.  Trump and his administration have adopted an increasingly tough stance on Beijing. Tuesday was the deadline for the president to sign legislation approved by the U.S. Congress to penalize banks doing business with Chinese officials who implement Beijing’s draconian new national security law on Hong Kong. Trump further stated that he holds China responsible for the Covid-19 pandemic being fought around the world.
  • The U.S. economy will have a slower-than-expected recovery amid a surge in novel coronavirus cases across the country, and a broad second wave of the disease could cause economic pain to deepen again, Federal Reserve officials warned on Tuesday.
  • On the data front, South African mining production improved on a monthly basis in May, as the country moved into lockdown level 4 and more operations returned to production.
  • In the US, consumer price index (CPI) rose more-than-expected on a monthly basis in June, the biggest gain since August 2012 as businesses reopened.
  • Small business optimism index jumped in June by the most since December 2016, as states reopened and owners expected the current recession to be short-lived.
  • The yield on benchmark government bonds mostly fell yesterday. The yield on 2026 bond fell to 7.70%. Further, the yield on 2023 bond declined to 4.88%, while that for the longer-dated 2030 issue marginally rose to 9.43%.

In early trade on Wednesday, the US dollar is trading 0.3% lower against the South African rand at R16.6965, while the euro is trading 0.2% lower at R19.0413.  The British pound has declined 0.1% against the South African rand to trade at R20.9943.

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

  • Hopes that the European Union leaders might agree on stimulus and deepening fiscal integration to shield the economy from the pandemic.
  • On the data front, the eurozone’s seasonally adjusted industrial production rebounded in May.
  • In Germany, CPI for June came in line with investor expectations. Meanwhile, economic sentiment in Germany worsened in July and a separate gauge for current conditions declined more-than-expected during the same period.

In early trade on Wednesday, the euro has marginally advanced against the US dollar to trade at $1.1404, while it has weakened 0.1% against the British pound to trade at GBP0.9070.





For those interested, this is a podcast on their project