LOCKDOWN – DAY 7
Well April fool done and dusted but this morning we awoke to an all time record low on the ZARUSD rate with the other currencies looking as bad! By the close of trade on Wednesday, the South African rand weakened against the US dollar.
- As economic data all over the world reinforced concerns of a deep and prolonged slump due to the coronavirus outbreak, causing investors to dump riskier assets. An array of lawmakers and President Donald Trump have started to acknowledge the need for another coronavirus relief bill, even after they passed the largest emergency spending plan in U.S. history last week.
- To ease strains in the Treasury market resulting from the coronavirus and increase banking organizations’ ability to provide credit to households and businesses, the Federal Reserve Board on Wednesday announced a temporary change to its supplementary leverage ratio rule. The change would exclude U.S. Treasury securities and deposits at Federal Reserve Banks from the calculation of the rule for holding companies, and will be in effect until March 31, 2021.
- In the US, manufacturing activity contracted more-than-expected in March. Disruptions caused by the coronavirus outbreak pushed new orders received by factories to an 11-year low, reinforcing concerns that the economy was in recession. Light vehicle sales in the United States fell nearly 27% in March compared with a month earlier, data released by an automotive research group showed on Wednesday, as the coronavirus outbreak intensified and shuttered dealerships across much of the country.
- The ADP National Employment Report showed that private payrolls recorded the first decline since September 2017 in March, amid business closures and as authorities tried to contain the coronavirus pandemic.
- The Boston Federal Reserve President, Eric Rosengren, stated that social distancing efforts meant to contain the outbreak have “stilled” the economy and could lead the unemployment rate to “rise dramatically”.
- The yield on benchmark government bonds ended mixed yesterday. The yield on 2021 bond declined to 4.95% while that for the longer-dated 2030 issue rose to 11.02%.
In early trade on Thursday, the US dollar is trading 0.2% higher against the South African rand at R18.2588, while the euro is trading 0.1% lower at R19.9657. The British pound has gained 0.3% against the South African rand to trade at R22.6092.
By the close of trade on Wednesday, the euro mostly declined against most of the major currencies.
- Data showed that Germany’s export-dependent manufacturing sector witnessed its steepest fall in output in almost 11 years in March, due to virus-led plant closures.
- German retail sales accelerated on an annual basis in March.
- In the UK, manufacturing output registered its fastest rate of decline in eight years, as the COVID-19 outbreak and efforts to slow its spread took its toll on the industry.
In early trade, the euro has slipped 0.3% against the US dollar to trade at $1.0934, while it has weakened 0.3% against the British pound to trade at GBP0.8831.
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Last updated Apr 2, 2020