CURRENCY PATROL    DAY 6 LOCKDOWN

 By the close of trade on Tuesday, the South African rand strengthened against the US dollar.   No, I know it’s not an April fool joke.

  • The number of new coronavirus cases in Italy leveled off at a two-week low, a sign the outbreak in Europe’s virus epicenter may be coming under control, even as neighboring Spain suffered its deadliest day yet. Italy’s new infections totaled 4,053, civil protection authorities said in Rome on Tuesday. That compares with 4,050 the previous day, the fewest new cases since March 17.
  • After a few days of calm, extreme volatility returned to the mortgage-backed securities market Tuesday morning, as the Federal Reserve allowed the prices of mortgage-backed securities to fall sharply.
  • Robust South African trade balance numbers lifted the pressure on the domestic currency, which had slumped following a sovereign credit rating downgrade in the previous session.
  • The greenback lost ground, after US consumer confidence dropped to a near three-year low in March, as households expressed concerns about the economy’s near-term outlook amid the COVID-19 epidemic.
  • Meanwhile, the Chicago PMI dropped in March, while US home prices advanced on an annual basis in January.
  • Separately, the Federal Reserve (Fed) broadened the ability of foreign central banks to access US dollars during the coronavirus crisis, by allowing them to exchange their holdings of US Treasury securities for overnight dollar loans.
  • The yield on benchmark government bonds ended mixed yesterday. The yield on 2021 bond advanced to 5.01% while that for the longer-dated 2030 issue fell to 10.96%.

In early trade on Wednesday, the US dollar is trading 0.1% lower against the South African rand at R17.826, while the euro is trading 0.2% lower at R19.6519.  The British pound has declined 0.4% against the South African rand to trade at R22.0889.

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

  • The eurozone’s consumer price index (CPI) slowed on an annual basis in March.
  • UK economic growth stagnated in 4Q19, as the coronavirus crisis loomed.

In early trade on Wednesday, the euro has slipped 0.1% against the US dollar to trade at $1.1023, while it has gained 0.1% against the British pound to trade at GBP0.8894.

NOVEL CORONAVIRUS STATS

852,366 confirmed cases

41,918 reported deaths

177,794 recovered*

South Africa

Confirmed 1,353

Dead 5

Recovered 31

Confirmed Today 0

Died Today 0