By the close of trade on Friday, the South African rand weakened against the US dollar.  In the US Washington DC is closed down by the United States Secret Service who take over as the lead agency for protection of the incoming President Elect Joe Biden on Wednesday.

  • A top economic adviser to President-elect Joe Biden warned the U.S. economy is “spiraling downward” and called for swift action to address vulnerabilities that the global pandemic has drawn into focus. Brian Deese, who will serve as director of Biden’s National Economic Council, said Sunday that the incoming administration’s $1.9 trillion spending plan would generate “the kind of robust recovery we need.” Biden’s proposal includes more direct payments to households, an expansion of jobless benefits, more money for state and local governments and an expansion of vaccinations and virus-testing programs.
  • Gross domestic product grew by 6.5% in the fourth quarter from a year ago. Economists expected China to have been the only major economy to grow last year, and predicted GDP expanded by just over 2%. Covid-19 first emerged in the Chinese city of Wuhan in late 2019. In an effort to control the virus, Chinese authorities shut down more than half the country, and the economy contracted by 6.8% in the first three months of 2020. However, China returned to growth by the second quarter.
  • Janet Yellen, President-elect Joe Biden’s pick to take over the U.S. Treasury, is expected to affirm the United States’ commitment to market-determined foreign exchange rates when she testifies on Capitol Hill on Tuesday.
  • In the US, retail sales fell on a monthly basis in December, as renewed measures to slow the spread of COVID-19 triggered large-scale job losses.
  • The Michigan consumer sentiment fell in January, as a relentless surge in COVID-19 infections and deaths weighed on domestic economic outlook.
  • The producer price index (PPI) rose slightly on a monthly basis in December.
  • Manufacturing output increased more-than-expected in December, but disruptions to the supply chain as the COVID-19 pandemic keeps some workers at home could slow production in the months ahead.
  • The yield on benchmark government bonds mostly rose on Friday. The yield on 2026 bond rose to 6.65%. Further, the yield on 2023 bond declined to 4.46%, while that for the longer-dated 2030 issue rose to 8.82%.

In early trade on Monday, the US dollar is trading higher against the South African rand at R15.2521, while the euro is trading higher at R18.4066.  The British pound has marginally declined against the South African rand to trade at R20.6992.

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

  • The eurozone trade surplus widened as expected in November, on account of a better trade balance with Russia, Turkey, Norway, Japan and South Korea.
  • In the UK, the economy contracted in November, as the country faced a new lockdown. However, the decline was smaller-than-expected as businesses adjusted to social distancing.

In early trade on Monday, the euro slipped against the US dollar to trade at $1.2076, while it has gained against the British pound to trade at GBP0.8898.