Dollar still marching

The waves the ECB made with talks about a 75-bps hike next week only lasted a short while. The dollar turns around at the start of the US session, with the Euro trading below parity again. The European political players also want to intervene in the power markets. Will this be a game changer? We have seen some of the energy prices come back from its elevated levels, but what will be the plan is the question. The GBP also traded well above 1.17 but has since fallen back to 1.1630. The hawkish stance from the FED will keep pressure on short-term yields and keep the dollar supported. 

Rand under pressure

Our local currency held up well, strengthening in the morning, but as the US session kicked in, the rand lost ground. Currently trading back up R16.95 eyeing the R17.00 level once again. With US equities under pressure and the dollar on the front foot, the rand is part of the risk-off play. Volatility will be with us some time as the market awaits big data, like US non-farm payrolls on Friday and key Central Bank decisions in Sept. 

Commodity update

Gold is still under pressure as short higher yields in the US are not helping the yellow metal. Platinum and Palladium are also weaker on the day. In general, the whole commodity space came under pressure, with Brent crude oil just hovering above $100 per barrel. Copper and Aluminium are back to levels last seen two weeks ago, as there are once again concerns about Covid lockdowns in China. 

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