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

  • The SARB’s monetary policy committee kept its key interest rates on hold for the third time in a row. The central bank, however, was more upbeat about growth, revising its forecasts for GDP in 2021 to 3.6% and predicting an expansion of 2.4% in 2022. That is up from its November forecasts of 3.5% in 2021 and 2.4% in 2022.
  • Meanwhile, in the US, the number of people filing new applications for unemployment benefits decreased modestly for the week ended 16 January.
  • Amid her 114 pages of written follow-up responses to her Senate confirmation hearing, Treasury Secretary-designate Janet Yellen touched on various topics spanning from climate change to sanctions policy and moves to maintain the dollar’s status as the world’s main reserve currency, telling lawmakers that she will work with President Joe Biden to get countries to refrain from currency manipulation. “The president has committed to opposing efforts by countries to artificially manipulate their currencies to gain an unfair trade advantage.   Yellan wasted no time telegraphing Joe Biden’s plans to be tough on China. Events at BlackRock Inc, though, demonstrate how much of an uphill slog the new president faces. As Donald Trump exited the White House, news dropped that the US investment giant had vacated the top spot for exchange-traded funds tracking onshore stocks. The new number one in the space? China Asset Management (Hong Kong) Ltd. Such funds are popular with China bulls amid US sanctions and other clampdowns on China.
  • Nearly 3 million Americans appear to have fallen off the unemployment benefits cliff after Christmas, a scenario many had feared amid delays in pushing through another Covid relief bill. Jobless benefits offered through two temporary CARES Act programs were set to lapse the last weekend in December a “cliff” that would immediately deny income support to millions of workers absent federal intervention. Congress scrambled to pass a pandemic aid measure, after months of failed negotiations, to prevent that outcome. Legislators passed a $900 billion package on Dec. 21.
  • The yield on benchmark government bonds mostly rose yesterday. The yield on 2026 bond rose to 6.63%. Further, the yield on 2023 bond advanced to 4.51% while that for the longer-dated 2030 issue fell to 8.71%.

In early trade on Friday, the US dollar is trading higher against the South African rand at R15.0022, while the euro is trading higher at R18.2526.  The British pound has gained against the South African rand to trade at R20.5672.

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

  • Asian stock markets are mixed on Friday after U.S. President-elect Joe Biden revealed details of a $1.9 trillion stimulus proposal, called the American Rescue Plan, to support American households and businesses amid the pandemic. Worries about rising U.S.-China tensions weighed on the markets after the Trump administration placed Chinese smartphone maker Xiaomi on a blacklist of companies with alleged ties to the Chinese military. The Australian market is extending gains from the previous session.
  • The European Central Bank (ECB) kept its interest rate unchanged but warned that the recent surge in COVID-19 infections posed a risk to the eurozone’s recovery, while reaffirming its pledge to keep borrowing costs at record lows to help the regional economy weather the pandemic.
  • The ECB President, Christine Lagarde stated that the coronavirus pandemic is still posing “serious risks” to the eurozone economy.
  • Japan’s factory activity slipped into contraction in January and the services sector was more pessimistic, a private-sector survey showed on Friday, as emergency measures taken in response to a resurgence of COVID-19 infections hurt sentiment. Japanese Prime Minister Suga this month announced a second state of emergency in the country to stem a rise in coronavirus cases, which now covers Tokyo, Osaka, Kyoto and other areas accounting for 55% of the nation’s population. The au Jibun Bank Flash Japan Manufacturing Purchasing Managers’ Index (PMI) fell to 49.7 from a final 50.0 in December

In early trade on Friday, the euro has advanced against the US dollar to trade at $1.2162, while it has gained against the British pound to trade at GBP0.8848.