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

  • The greenback lost ground, hurt by deteriorating US-China relations and domestic economic concerns. Gold prices hit record highs on Monday as the safe haven asset continued to attract investors.  The dollar has become the world’s punching bag and it’s likely to stay that way for awhile. The world’s reserve currency benefited in a big way from a flight-to-safety, which drove it to a three-and-a-half year high in March as the coronavirus pandemic spread to the U.S. Now, as the world’s focus has shifted back to fundamentals, the dollar has rapidly slumped to a two-year low.
  • Vice President Mike Pence spoke in Miami as the biggest test yet of an experimental COVID-19 vaccine got underway Monday.
  • In the US, durable goods came in better-than-expected for June, driven by robust demand for motor vehicles. Further, the Dallas Fed manufacturing index improved in July.
  • Locally, the IMF approved a US$4.3bn loan to South Africa to assist in the fight against COVID-19, this as we stand as the country with the 5th most infection cases globally.
  • The yield on benchmark government bonds fell yesterday. The yield on 2026 bond fell to 7.44%. Further, the yield on 2023 bond declined to 4.93% while that for the longer-dated 2030 issue dropped to 9.13%.

In early trade on Tuesday, the US dollar is trading 0.2% lower against the South African rand at R16.3886, while the euro is trading 0.2% lower at R19.2509.  The British pound has declined 0.2% against the South African rand to trade at R21.1066.

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

  • German business morale continued to recover in July from its biggest decline in decades, with companies expecting the eurozone’s largest economy to rebound from the coronavirus shock. The Bundesbank in its monthly report, stated that German economy is rebounding and may well continue to do so in the second half of the year, supported by the government’s fiscal stimulus measures taken in response to the coronavirus outbreak. The central bank also expects the pandemic-related global slowdown in trade to bring down the country’s oversized current account surplus.

In early trade on Tuesday, the euro has slipped 0.1% against the US dollar to trade at $1.1746, while it has marginally weakened against the British pound to trade at GBP0.9121.



For those interested, this is a podcast on their project