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

  • In South Africa, consumer price index (CPI) rose more-than-expected on a monthly basis in June, with fuel prices still a dominant feature.
  • In the US, the Fed kept the benchmark lending rate unchanged. The Fed Chairman, Jerome Powell, stated that the central bank will keep its interest rate target range until it is confident that the US economy has weathered the COVID-19 pandemic and is on track for maximum employment and price stability goals. The Federal Reserve is committed to using its full range of tools to support the U.S. economy in this challenging time, thereby promoting its maximum employment and price stability goals. The coronavirus outbreak is causing tremendous human and economic hardship across the United States and around the world.
  • Republicans and Democrats appeared far from striking a coronavirus relief deal Wednesday as millions of Americans wait to see whether Congress will renew financial lifelines during an ongoing economic crisis. As negotiators cite little progress in talks and congressional leaders snipe at one another on Capitol Hill, the Trump administration again raised the prospect of a short-term plan to address only enhanced unemployment insurance and a federal eviction moratorium while the sides hash out a broader bill.
  • On the data front, US goods trade deficit narrowed in June, as exports rebounded, following several months of decline, suggesting a recovery in global trade after being severely disrupted by the COVID-19 pandemic.
  • Pending home sales surprisingly rebounded on an annual basis in June, indicating that the housing market was weathering the COVID-19 pandemic far better than the broader economy.
  • The yield on benchmark government bonds mostly rose yesterday. The yield on 2026 bond rose to 7.54%. Further, the yield on 2023 bond declined to 4.85% while that for the longer-dated 2030 issue rose to 9.23%.

In early trade on Thursday, the US dollar is trading 0.2% higher against the South African rand at R16.5781, while the euro is trading 0.1% higher at R19.5240.  The British pound has gained 0.1% against the South African rand to trade at R21.5249.

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

  • The U.K. is weeks away from signing its first major trade deal since it left the European in January, according to media reports on Wednesday. The U.K. has made a breakthrough in talks with Japan and the two countries will sign a free-trade agreement soon.
  • Cyprus’s banks should continue reducing their non-performing loans as soon as conditions allow and foreclosures halted by the pandemic resume, Central Bank of Cyprus Governor Constantinos Herodotou said.
  • The German import price index rose more-than-expected on a monthly basis in June.

In early trade on Thursday, the euro has slipped 0.1% against the US dollar to trade at $1.1777, while it has marginally weakened against the British pound to trade at GBP0.9070.





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