admin, easing concern about the region’s debt crisis and raising demand for higher-yielding assets.
The currency of Africa’s biggest economy appreciated for a sixth day, adding 0,2 percent to 6,7179 per dollar in Johannesburg. It strengthened 0.3 percent to 9,7483 per euro. Immediate-delivery gold added as much as 0,6 percent an ounce and South African stocks climbed.
The dollar touched a three-week low versus the euro. The ECB meeting scheduled for tomorrow is expected to see an increase in its benchmark rate by 25 basis points from 1,25 to 1,5 percent. Gold, together with platinum, accounts for a fifth of South Africa’s export earnings.
“Given that global risk appetite is still high and the dollar remains under pressure, the bias is in favour of rand strength, we are also seeing a lot of selling on the dollar, investors taking positions on high-yielding assets.”
In Europe the euro reversed gains against the yen and the dollar after the announcement on selective default that a debt rollover is likely to put Greece in such a position.
The euro fell to 117,26 against the yen. The euro was trading at US$1,4523 from US$1,4526 against the dollar.
The dollar traded at 80,74 yen from 80,83 yen. Markets are reluctant to aggressively sell the euro, as investors await that ECB meeting.
In London the pound advanced against the euro in as many days. The pound appreciated by near half a percent to 90,13 to the euro from 90,39. Given the weak data in the UK at the moment the pound has been under pressure and looks like the market is considering selling the pound and long the euro.
The so-called classical currency the Swiss franc depreciated against the dollar by 0,1 percent to 84,90 in London trade. The Australian dollar declined from an seven-week high against the US currency after government reports showed retail sales slid in May, damping demand for the nation’s assets.
The Aussie dollar slid the most against New Zealand’s dollar after a gauge of Australia’s annual inflation slid below the top of the central bank’s target range for the first time in 11 months. Reserve Bank of Australia policy makers will leave interest rates unchanged tomorrow, according to economists’ survey in Australia’s Central Bank. “Retail sales is one of the critical economic releases and will add to the story that the economy is going through a soft patch, so you might see the Australian dollar sell off further.”
Australia’s dollar dropped to US$1,0742 in Sydney from US$1,0770 in New York ,when it climbed to US$1,0790. The currency declined 0,4 percent to 86,75 yen, and fell 0,5 percent to NZ$1,2942. New Zealand’s dollar appreciated 0,3 percent to 82,96 US cents, and traded at 66,99 yen from 66,87 yen.
The New Zealand dollar strength came amid demand for building materials needed in Japan for reconstruction. The New Zealand dollar looks attractive against the Aussie dollar given the current scenario in Australia on their retail figures.
On the commodity front, gold advanced for the first time in three days from US$1 478,83 on 1 July to US$1 496,10 an ounce in London trade.
Seasonal trends tend to be positive for gold and this current dip offers entry opportunities for gold once technicals hint at stabilisation.
Crude oil was facing resistance at US$95 per barrel but I’m sure it will breakout beating that US$95 patch.
For more information, views and comments feel free to contact Prodigy Chinanga on 0772753594 or e-mail to chinangaprodigy @yahoo.co.uk
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