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

  • COVID-19 vaccine developments faded and investors looked ahead to a rate decision by the local central bank.   An exchange-traded fund betting on U.S. dollar gains is shrinking rapidly as the currency’s outlook darkens. Total assets in the Invesco DB US Dollar Index Bullish Fund (ticker UUP) have dwindled to $337 million, down from a peak of $1.04 billion in April, according to data compiled by Bloomberg. More than $68 million exited the ETF on Monday in its biggest single-day outflow in a month. Investors have become increasingly wary as Wall Street’s warnings on the dollar grow louder. Citigroup Inc. strategists said this week that the currency could plunge as much as 20% in 2021 based around covid-19 vaccine successes.
  • On the data front, retail sales showed continued recovery in September.
  • In the US, housing starts rose in October, as the housing market continues to be driven by record low mortgage rates.
  • The New York Federal Reserve (Fed) Bank President, John Williams, stated that the US economy is now affected more by swings in coronavirus infections than it is by restrictions on certain activities and that a surge in infections could slow growth.
  • News of Tesla’s addition to the S&P 500 index sent shares of the automaker soaring on Tuesday, helping further cement chief executive Elon Musk as one of the richest people in the world. As of Tuesday’s opening bell, when the electric automaker’s stock gained as much as 12%, Musk’s wealth rose $US11.8 billion to hit $US114 billion, according to Bloomberg’s Billionaires Index. He’s now eclipsed Facebook founder Mark Zuckerberg to take third place in the global wealth ranking, Bloomberg reported.
  • The yield on benchmark government bonds mostly fell yesterday. The yield on 2026 bond dropped to 6.93%. Further, the yield on 2023 bond advanced to 4.14%, while that for the longer-dated 2030 issue dipped to 8.80%.

In early trade on Thursday, the US dollar is trading higher against the South African rand at R15.5222, while the euro is trading higher at R18.3768.  The British pound has gained against the South African rand to trade at R20.5284.

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

  • The government has been defeated in the House of Lords over its Brexit law. The bill aims to create a UK-wide internal market after the Brexit transition period ends on 31 December. Peers voted 367 votes to 209 to amend the Internal Market Bill, after claims that it would allow the UK government to “shackle” devolved administrations as powers are returned from Brussels. Cabinet Office Minister Lord True said this amendment would create confusion for business.
  • The U.K. and Canada are on the brink of signing a new trade agreement to replace the existing deal Britain has through European Union membership. An announcement could come within days, according to people familiar with the matter, speaking on condition they not be identified. The agreement would be a major boost to U.K. Prime Minister Boris Johnson in his efforts to plot a new course for Britain as a global trading nation outside the EU.
  • In the eurozone, consumer price index (CPI) remained negative for a third consecutive month on an annual basis in October, as energy prices were lower.
  • In the UK, CPI rose more-than-expected on an annual basis in October.

In early trade on Thursday, the euro slipped against the US dollar to trade at $1.1832, while it has gained against the British pound to trade at GBP0.9022.