LOCKDOWN LEVEL Ver 3.2 [DAY 12]
TOTAL DAYS 119 – 07 HOURS 45 MINUTES
By the close of trade on Thursday, the South African rand weakened against the US dollar.
- Late Thursday night President Cyril Ramaphosa addressed the Nation. His speech did little to set out the steps being taken to fight the virus and in the main, the talk centered on the extent of the corruption and theft that is going on with Covid-19 relief funding by internal departments and collusion with corrupt citizens manipulating corrupt individuals open to defrauding grant schemes.
- The Rands weakening trajectory was checked after the SARB slashed lending rate for a fifth time in a row. The central bank cut the repo rate by 25bps to 3.50%, in line with market expectations, extending relief to South Africa’s embattled consumers and businesses caught in the grip of the COVID-19 pandemic. The SARB cut its gross domestic product (GDP) forecasts further for 2020, expecting a contraction of 7.3%, compared with its May forecast of 7.0%.
- In the US, the number of people filing for unemployment benefits unexpectedly rose for the week ended 18 July, suggesting that the labour market was stalling, amid a resurgence in new COVID-19 cases and depressed demand. A popular measure of the U.S. dollar on Thursday was on track for its lowest close in nearly two years, extending a decline in the greenback that has accelerated in recent weeks in the fallout from the COVID-19 pandemic.
- China has ordered the US to shut its Consulate in Chengdu, SW China’s Sichuan Province, in retaliation for the closure of China’s Consulate General in Houston.
- The yield on benchmark government bonds mostly rose yesterday. The yield on 2026 bond rose to 7.43%. Further, the yield on 2023 bond advanced to 4.95% while that for the longer-dated 2030 issue fell to 9.10%.
In early trade on Friday, the US dollar is trading 0.1% lower against the South African rand at R16.6495, while the euro is trading 0.1% higher at R19.3413. The British pound has marginally gained against the South African rand to trade at R21.2398.
By the close of trade on Thursday, the euro advanced against most of the major currencies.
- German consumer confidence improved for August, as coronavirus lockdowns are slowly easing and bolstered by generous stimulus packages.
- Business confidence in France gained further ground in July.
- On the contrary, the eurozone’s consumer confidence index deteriorated in July, even though most European governments relaxed restrictions on firms and travel.
In early trade on Friday, the euro has advanced 0.2% against the US dollar to trade at $1.1617, while it has gained 0.1% against the British pound to trade at GBP0.9107.
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