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

  • The greenback gained ground, after the US housing starts that showed home construction rose to its fastest pace since 2006 in December, suggesting that the housing market recovery was back on track amid low mortgage rates.
  • Industrial production fell on a monthly basis in December.
  • JOLTS job openings dropped in December.
  • The Michigan consumer sentiment index surprisingly fell in January.
  • The yield on benchmark government bonds ended mixed on Friday. The yield on 2020 bond held steady at 6.94% while that for the longer-dated 2026 issue fell to 8.17%.
  • In the EM currency basket, The Chinese yuan was the second strongest currency (-0.85%) behind the Indonesian rupiah (-0.95%).  The Mexican peso climbed another 0.7%, Brazil’s real fell 1.5%, bringing this year’s loss to 3.15% and only beaten by the South African rand’s 3.25% drop, though the latter got a 25 bp rate cut out of it as well.

In early trade on Monday, the US dollar is trading 0.2% lower against the South African rand at R14.4418, while the euro is trading 0.2% lower at R16.0239.  The British pound has declined 0.2% against the South African rand to trade at R18.7807.

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

  • The eurozone’s consumer price index (CPI) held steady on an annual basis in December.
  • UK house prices rose over the last month at the fastest rate on record for the time of the year, as sellers felt more confident about the outlook for the housing market after the general election, according to Rightmove. The average price of properties coming on to the market jumped by 2.3%, the biggest rise for the period since the property website started its house price index in 2002
  • U.K. Chancellor of the Exchequer Sajid Javid signaled Britain is planning to shift its economy further away from the European Union’s, firing an early salvo in what’s set to be a fractious year to hammer out their future relationship.

“There will not be alignment, we will not be a rule taker, we will not be in the single market and we will not be in the customs union — and we will do this by the end of the year,” Javid said in an interview with the Financial Times.

Javid’s comments, coupled with a report in the Daily Telegraph that Prime Minister Boris Johnson is planning to formally open trade talks with the U.S. as soon as next month, suggest Britain is seeking to put early pressure on the EU’s trade team even before the U.K. officially quits the bloc Jan. 31.

In opening trade on Monday, the euro has marginally advanced against the US dollar to trade at $1.1096, while it has gained 0.1% against the British pound to trade at GBP0.8532.