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

  • Consumer price index (CPI) in South Africa rose to a seven-month high on an annual basis in January due to higher fuel prices.
  • In the US, minutes of the Federal Reserve’s (Fed) January policy meeting showed that the policymakers were cautiously optimistic about their ability to hold interest rates steady this year as they stated that the US economy seemed stronger in late January than they had expected. However, they expressed concerns about the coronavirus outbreak in China. Senior Federal Reserve staff proposed ending longer-term loans to banks after April as part of a broader blueprint laying out how the central bank could scale back the support provided to money markets, the minutes from the January policy meeting showed. The proposal, which received a warm reception from policymakers, explained how the Fed could gradually reduce interventions in the market for repurchase agreements, or repo, and slow its balance sheet expansion
  • On the data front, producer price index (PPI) increased to its highest level since October 2018 on a monthly basis in January, boosted by gains in the costs of services such as healthcare and hotel accommodation.
  • Housing starts fell less-than-expected in January, while building permits surged to a near 13-year high, pointing to sustained housing market strength that could help keep the longest economic expansion in history on track.
  • The yield on benchmark government bonds fell yesterday. The yield on 2021 bond declined to 6.51% while that for the longer-dated 2030 issue fell to 8.88%.
  • SpaceX and Space Adventures have partnered to offer space tourists a trip to orbit on the SpaceX Crew Dragon space capsule. They expect the first flight to launch in late 2021 or early 2022. Around $50 million will get you a seat.

In early trade on Thursday, the US dollar is trading 0.5% higher against the South African rand at R15.0581, while the euro is trading 0.4% higher at R16.2565.  The British pound has gained 0.4% against the South African rand to trade at R19.4336.

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

  • Seasonally adjusted construction output in the eurozone fell on a monthly basis in December.

In early trade on Thursday, the euro has slipped 0.1% against the US dollar to trade at $1.0796, while it has marginally gained against the British pound to trade at GBP0.8365.