As the year draws to a close we find ourselves under an adjusted level 3 lockdown, facing an unseen danger that has now surrounded our inner circles, networks of friends and ripped loved ones from our lives. RIP to those who have been taken by Covid-19.

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

  • Risk sentiment remains buoyant with vaccine rollouts providing confidence despite growing Covid-19 case numbers.
  • The U.S. Small Business Administration today announced that the deadline to apply for the Economic Injury Disaster Loan (EIDL) program for the COVID-19 Pandemic disaster declaration is extended to Dec. 31, 2021. The deadline extension comes as a result of the recent bipartisan COVID-19 relief bill passed by Congress and enacted by President Trump on Dec. 27, 2020. To date, the SBA has approved $197 billion in low-interest loans which provides working capital funds to small businesses, non-profits and agricultural businesses make it through this challenging time.
  • Senate Majority Leader Mitch McConnell on Wednesday closed off chances that the Senate would pass anytime soon a House bill that would give most Americans $2,000 stimulus payments. The Kentucky Republican said the House legislation, approved in a bipartisan vote Monday, “has no realistic path” to quick passage in the Senate and that it falls short of the demands of President Donald Trump. He again blocked an attempt by Democratic leader Chuck Schumer to adopt the House bill to increase the payments to $2,000 from the $600 by unanimous consent.
  • In the US, trade deficit widened in November, reflecting weaker US exports tied to the coronavirus pandemic.
  • Pending home sales fell for a third straight month in November, as an acute shortage of properties pushed up prices, though the housing market remains supported by record-low mortgage rates.
  • The yield on benchmark government bonds fell yesterday. The yield on 2026 bond fell to 6.68%. Further, the yield on 2023 bond declined to 4.54% while that for the longer-dated 2030 issue fell to 8.75%.

In early trade on Thursday, the US dollar is trading higher against the South African rand at R14.6244, while the euro is trading marginally lower at R17.9750.  The British pound has marginally declined against the South African rand to trade at R19.9266.

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

  • Meanwhile, investors have expressed optimism for an improving economic outlook, as COVID-19 vaccines are rolled out and unprecedented fiscal and monetary stimulus aims to boost global growth and asset prices in 2021. Britain’s PM Johnson stated that Britain was in a race to vaccinate the public or face a stronger lockdown.
  • With no major surprises, UK House of Lords approved the Brexit trade deal during early Thursday in Asia. “Prime Minister Boris Johnson’s post-Brexit trade deal won approval from the UK Parliament barely 24 hours before the country’s final split from the European Union,” said Bloomberg. The agreement earlier crossed the House of Commons with 521 votes in favor against 73 opposing it. It should be noted that the Scottish National Party (SNP) is against the bills.
  • The U.K. is set to join the U.S., Canada and most other countries whose residents are unwelcome visitors to the European Union because they haven’t sufficiently contained the coronavirus outbreak. EU governments are making no changes to their common travel “white list” in the immediate run-up to Britain’s scheduled departure from the European single market on Friday, according to an official familiar with the matter. That’s when the post-Brexit transition ends and the U.K. starts to be treated by the EU as any other country outside the bloc.
  • Bundesbank President Jens Weidmann warned euro zone governments forced to increase public debt to support their economies during the coronavirus pandemic not to expect the European Central Bank to keep interest rates low forever. “We will not take into consideration sovereign debt servicing costs if price stability mandates higher interest rates,” Weidmann, a member of the ECB’s Governing Council, told the Rheinische Post newspaper in remarks published on Thursday.

In early trade on Thursday, the euro has slipped against the US dollar to trade at $1.2292, while it has marginally weakened against the British pound to trade at GBP0.9032.





Have a safe New Year everyone and all of the Stewards FX Team wish everyone all the best for 2021.  Back on the 4th January 2021.