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

  • Rising tensions between the US and China to center stage.  The Covid-19 crises was not far behind as the U.S. economic recovery showed signs of plateauing last week as the country battled rising coronavirus case counts and an increasingly fractured government response, according to data from a broad set of industry and government sources.
  • Washington’s threats of financial sanctions against Chinese individuals who were involved in formulating the Hong Kong national security law and Chinese banks that do business with them, as well as officials and institutions that took part in alleged crimes in Xinjiang, has rung alarm bells in both Hong Kong and Beijing.
  • Democrats and Republicans need to resolve several disputes about what to include in a developing coronavirus relief bill as the pandemic wreaks havoc across the United States and financial lifelines are set to expire, House Speaker Nancy Pelosi said Thursday. The Democratic-held House and GOP-controlled Senate acknowledge they need to approve more aid to combat the deadly disease’s unabated spread while supporting the economy and educating students. However the divide is looking more like a steep climb before an agreement is reached.
  • On the data front, South African producer price index (PPI) fell less-than-expected on a monthly basis in May.
  • In the US, retail sales rose more-than-expected on a monthly basis in June, as consumers bought big-ticket items like motor vehicles and dined out.
  • The number of people who filed for unemployment benefits advanced for the week 10 July, as the country continued to grapple with the economic impacts of the coronavirus pandemic.
  • On the other hand, the Philadelphia Fed manufacturing index came in better-than-expected for July.
  • The yield on benchmark government bonds fell yesterday. The yield on 2026 bond fell to 7.54%. Further, the yield on 2023 bond declined to 4.69% while that for the longer-dated 2030 issue marginally fell to 9.35%.

In early trade on Friday, the US dollar is trading 0.1% lower against the South African rand at R16.7366, while the euro is trading 0.1% lower at R19.0567.   The British pound has marginally declined against the South African rand to trade at R21.0303.

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

  • The European Central Bank (ECB) opted to keep interest rates and its emergency coronavirus stimulus program unchanged, while it monitors the economic strength of the eurozone. The ECB expects rates to remain at their present or lower levels until it has seen the inflation outlook robustly converge to a level sufficiently close to, but below 2.0%.
  • On data front, the eurozone’s trade surplus widened in May, as lockdowns around the world began to ease.

In early trade on Friday, the euro has marginally advanced against the US dollar to trade at $1.1385, while it has weakened 0.1% against the British pound to trade at GBP0.9061.





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