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

  • Gains were capped as mounting tension between the US and China weighed on risk sentiment.  Treasury Secretary Steven Mnuchin on Sunday said Republicans have now finalized their latest piece of coronavirus relief legislation, worth about $1 trillion, and intend to introduce it Monday.
  • The US consulate in Chengdu has officially closed and Chinese authorities say they have taken control of the premises.
  • In the US, manufacturing PMI rose less than expected in July.
  • Services PMI also increased less than expected during the same period as the industry firms reported a faster pace of decline in new orders in July. U.S. private sector firms indicated a stabilisation of business activity at the start of the third quarter, with the contraction in service sector output slowing further and manufacturers signalling a modest upturn in production. Growth was impeded, however, by an increased rate of decline of new orders, linked in part to renewed coronavirus disease 2019 (COVID-19) containment measures adjusted for seasonal factors.
  • New home sales surged to a near 13-year high in June as the housing market outperforms the broader economy.
  • The yield on benchmark government bonds rose on Friday. The yield on 2026 bond rose to 7.50%. Further, the yield on 2023 bond advanced to 4.97% while that for the longer-dated 2030 issue rose to 9.19%.

In early trade on Monday, the US dollar is trading 0.4% lower against the South African rand at R16.5932, while the euro is trading 0.1% higher at R19.4318.  The British pound has gained 0.1% against the South African rand to trade at R21.3165.

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

  • As the UK, France, Norway and a handful of other European countries impose mandatory quarantines on travelers visiting from Spain, or warning their citizens to avoid travel to Catalonia, the epicenter of the latest outbreak, anxieties are rising as the outbreak in Barcelona and the surrounding suburbs, including the village of Lleida, and seven nearby towns, intensifies. A little over a week ago, Catalan authorities imposed a lockdown affecting 160,000 people in and around Lleida, a swath of suburban Barcelona.
  • The preliminary reading of Eurozone manufacturing and services PMI improved in July for the first time since the coronavirus pandemic hit, as more parts of the economy that were locked down to curtail its spread reopened and people emerged from their homes to work and spend money.
  • German manufacturing sector stabilised in July, giving hope for a recovery from a long recession exacerbated by the COVID-19 pandemic.

In early trade on Monday, the euro advanced 0.5% against the US dollar to trade at $1.1711, while it has gained 0.1% against the British pound to trade at GBP0.9116.





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