3 Jan

Daily Market Report 3 Jan

Dollar surges to a 2-year high, Rand holds steady
The Dollar has surged to a 2-year high, with the DXY index hitting 109.53 at one point last night. The likelihood of a much slower pace of rate cuts by the Fed was reinforced yesterday after better-than-expected jobless claims and US manufacturing data. New jobless claims were at 211k vs market estimates of 222k, while the US manufacturing number was at 49.4 compared to market expectations of 48.3. The DXY index has slipped back to 109.20 this morning, with the Dollar currently trading at 1.0270 against the Euro, 1.2395 against the Pound, and 157.35 against the Yen. The Chinese Yuan is under some pressure after the PBoC hinted at further interest rate cuts as part of the Government’s stimulus measures to boost the struggling economy. Asian and EM currencies are mainly weaker this morning, but the Rand is surprisingly holding on to yesterday’s gains against the Dollar while it is firmer against the rest of the major currencies. The local currency is currently trading at R18.70 against the Dollar, R19.22 against the Euro, and R23.22 against the Pound.

Gold up 1.3% despite the stronger Dollar
Gold is trading 1.3% higher than yesterday’s opening and is currently quoted at $2,660. Expectations of sustained central bank purchases this year, along with safe-haven demand due to ongoing global geopolitical unease, underpin the price. Platinum and Palladium are showing marginal gains this morning, while Brent crude is trading above the $76.00 mark in the hopes of increased demand as governments try to boost economic growth.

 

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