By the close of the trading week on Friday, the South African rand weakened against the US dollar.

  • Rockets slammed into an Iraqi airbase north of Baghdad on Sunday where US troops have been based, wounding at least four Iraqi troops. No immediate information about American casualties was reported. This is a developing story..
  • Load-shedding and weak domestic growth prospects continued to put pressure on the local currency.
  • In the US, non-farm payrolls rose less-than-expected in December.
  • Average hourly earnings also came in below expectations.
  • The unemployment rate remained steady at a 50-year low.
  • The US imposed fresh sanctions on Iran, targeting metals, construction, manufacturing, mining and textile sectors, in the wake of missile strikes on US bases in Iraq.
  • Meanwhile, a Chinese delegation is expected to arrive in Washington today to complete a Phase-1 trade agreement with the US.  The US Treasury Secretary Mnuchin has stated and confirmed that China’s commitments in the Phase-one trade deal with the United States were not changed during a lengthy translation process and will be released this week as the document is signed in Washington
  • The yield on benchmark government bonds fell on Friday. The yield on 2020 bond declined to 6.17% while that for the longer-dated 2026 issue fell to 8.21%.

In early trade on Monday, the US dollar is trading 0.3% lower against the South African rand at R14.3182, while the euro is trading 0.3% lower at R15.9348. The British pound has declined 0.5% against the South African rand to trade at R18.6682.

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

  • BREXIT – UK Prime Minister Boris Johnson wants to “unleash Britain’s potential.” First the economy has to catch back up with the rest of the world While Johnson’s deal with the EU late last year removed the imminent threat of a no-deal split, he still has to negotiate new trading arrangements. That creates another potential cliff edge at the end of the year.
  • The government remains upbeat. Ahead of the budget in March – the first major opportunity to spell out the economic plans of the new Conservative-majority government – Chancellor of the Exchequer Sajid Javid has promised a “decade of renewal.” Tax cuts and increased borrowing for investment are all on his agenda.
  • Meanwhile, the Bank of England (BoE) policymaker, Silvana Tenreyro, hinted towards a rate cut in the coming months, if growth does not pick up.
  • Another policymaker, Gertjan Vlieghe, stated that he might vote to cut interest rates later this month, if the UK economy does not show improvement.

In early trade on Monday, the euro has advanced 0.1% against the US dollar to trade at $1.1128, while it has gained 0.3% against the British pound to trade at GBP0.8535.