Trade report 24/03/2014
ZAR outlook
USD/ZAR expected range: 10.7300 – 10.8800
The ZAR has started the week in steady trade against the USD, but with concerns over a slowdown in growth in China the currency is looking vulnerable. The performance of the Rand last week is important to note as it was the worst week for the ZAR since January. The ZAR was trading at R10.8890/USD at 08:19 this morning, slightly improved from its close in New York on Friday of R10.9100/USD.
Local news
The main forecasted news on the local front for the week is the SARB’s announcement of its policy decision. Despite the banks reluctance to increase interest rates due to consumer debt it will need to come across in a hawkish light, to prevent further lack of interest in the ZAR by foreign investors. Economists are leaning towards the opinion that we may see another small interest rate hike, maybe even a smaller 25bp margin which would help maintain the SARB’s credibility going forward.
International news
Poor preliminary HSBC manufacturing PMI out of China has caused many emerging market currency's reliant on the economic giant for trade, to soften as the PMI data for March fell to an eight month low. The hawkish approach by the US Fed in its latest policy meeting has also had EMs on the backfoot. PMI Data released earlier today has shown that growth in Germany, the Eurozones largest economy, has improved at its slowest rate in 4 months. This has caused the EUR to soften vs the GBP.
TODAYS KEY DATA POINTS (GMT):
• 01:45 CN HSBC manufacturing PMI (preliminary)
• 08:30 DE Markit/BME manufacturing PMI (preliminary)
• 09:00 EZ Markit composite PMI (preliminary)
• 09:00 EZ Markit/BME manufacturing PMI (preliminary)
• 09:00 EZ Markit services PMI (preliminary)
• 12:30 US Chicago Fed activity index
• 13:45 US Markit manufacturing PMI (preliminary)
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Monday, 24 March 2014
Thursday, 20 March 2014
Fed comments have ZAR on backfoot
Trade report 20/03/2014
ZAR outlook
USD/ZAR expected range: 10.8000 – 10.9500
Hawkish comments by Federal Reserve Head Janet Yellen saw the ZAR and most emerging markets soften overnight. This could be compounded if US jobless claims come in better than anticipated today. The Rand was trading at R10.8695/USD this morning at 06:51 GMT, significantly weaker than its R10.6810 high on Wednesday before the Fed announcement.
Local news
Consumer inflation increased to 5.9% y/y as expected from the previous 5.8% y/y. Core inflation remained unchanged at 5.3% y/y. Retail sales data surprised to the topside and came in at 6.8% y/y from the previous reading of 2.7% y/y, much improved from the expected 2.9% y/y. This could influence the SARBs interest rate decision at its policy meeting next week.
International news
Comments by Janet Yellen that the US may increase interest rates as soon as 6 months after tapering ends put pressure on emerging market currencies as the USD strengthened. In other news the EUR-GBP exchange rate fell to its lowest level in a week as unemployment data out the Netherlands and inflation data from Germany came out weaker than expected, raising concerns that the Eurozone economic growth is still struggling.
TODAYS KEY DATA POINTS (GMT):
• 07:00 DE Producer prices y/y
• 07:15 JP BoJ’s Kuroda speak
• 12:30 US Initial jobless claims
• 14:00 US Existing home sales
• 14:00 US Leading indicators
• 14:00 US Philadelphia Fed index
• 20:00 US Fed releases Dodd-Frank Act stress test results
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ZAR outlook
USD/ZAR expected range: 10.8000 – 10.9500
Hawkish comments by Federal Reserve Head Janet Yellen saw the ZAR and most emerging markets soften overnight. This could be compounded if US jobless claims come in better than anticipated today. The Rand was trading at R10.8695/USD this morning at 06:51 GMT, significantly weaker than its R10.6810 high on Wednesday before the Fed announcement.
Local news
Consumer inflation increased to 5.9% y/y as expected from the previous 5.8% y/y. Core inflation remained unchanged at 5.3% y/y. Retail sales data surprised to the topside and came in at 6.8% y/y from the previous reading of 2.7% y/y, much improved from the expected 2.9% y/y. This could influence the SARBs interest rate decision at its policy meeting next week.
International news
Comments by Janet Yellen that the US may increase interest rates as soon as 6 months after tapering ends put pressure on emerging market currencies as the USD strengthened. In other news the EUR-GBP exchange rate fell to its lowest level in a week as unemployment data out the Netherlands and inflation data from Germany came out weaker than expected, raising concerns that the Eurozone economic growth is still struggling.
TODAYS KEY DATA POINTS (GMT):
• 07:00 DE Producer prices y/y
• 07:15 JP BoJ’s Kuroda speak
• 12:30 US Initial jobless claims
• 14:00 US Existing home sales
• 14:00 US Leading indicators
• 14:00 US Philadelphia Fed index
• 20:00 US Fed releases Dodd-Frank Act stress test results
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Wednesday, 19 March 2014
Rand steady ahead of FOMC announcement
Trade report 21/03/2014
ZAR outlook
USD/ZAR expected range: 10.6700 – 10.8300
Investors have been waiting for the announcement of the FOMC decision and the release of local data before taking strong positions, which has allowed the Rand to hold steady in trading today so far. The ZAR was little changed this morning from its overnight close in New York of R10.7395/USD as was trading at R10.7455/USD at 06:33GMT this morning.
Local news
Today sees the release of much anticipated inflation data as it may give economists clues as to the SARB’s interest rate decision at its policy meeting next week. A Reuters poll expects inflation to have increased mainly due to the weaker Rand pushing up the CPI index. Retail sales data is also due for release today and the market expects this figure to have dropped as consumers battle increased prices and higher debt levels.
International news
The Fed is due to announce its taper decision today, although the expected $10bil taper will unlikely have much effect in the markets, having already mostly been priced in. After weeks of controversy, the signing of a treaty by President Putin making Crimea part of Russia has eased the tensions in the Ukraine area which helped emerging market currencies strengthen yesterday.
TODAYS KEY DATA POINTS (GMT):
• 08:00 SA CPI y/y
• 11:00 SA Retail sales constant
• 09:30 GB ILO unemployment rate (3 mths)
• 10:00 EZ Construction output wda y/y
• 12:30 US Current account balance
• 18:00 US Fed QE pace
• 18:00 US FOMC rate decision
• 18:30 US Fed Chair Yellen holds press conference
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ZAR outlook
USD/ZAR expected range: 10.6700 – 10.8300
Investors have been waiting for the announcement of the FOMC decision and the release of local data before taking strong positions, which has allowed the Rand to hold steady in trading today so far. The ZAR was little changed this morning from its overnight close in New York of R10.7395/USD as was trading at R10.7455/USD at 06:33GMT this morning.
Local news
Today sees the release of much anticipated inflation data as it may give economists clues as to the SARB’s interest rate decision at its policy meeting next week. A Reuters poll expects inflation to have increased mainly due to the weaker Rand pushing up the CPI index. Retail sales data is also due for release today and the market expects this figure to have dropped as consumers battle increased prices and higher debt levels.
International news
The Fed is due to announce its taper decision today, although the expected $10bil taper will unlikely have much effect in the markets, having already mostly been priced in. After weeks of controversy, the signing of a treaty by President Putin making Crimea part of Russia has eased the tensions in the Ukraine area which helped emerging market currencies strengthen yesterday.
TODAYS KEY DATA POINTS (GMT):
• 08:00 SA CPI y/y
• 11:00 SA Retail sales constant
• 09:30 GB ILO unemployment rate (3 mths)
• 10:00 EZ Construction output wda y/y
• 12:30 US Current account balance
• 18:00 US Fed QE pace
• 18:00 US FOMC rate decision
• 18:30 US Fed Chair Yellen holds press conference
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Tuesday, 18 March 2014
Rand range-bound after yesterdays dip
Trade report 18/03/2014
ZAR outlook
USD/ZAR expected range: 10.7000 – 10.8400
The ZAR dipped slightly yesterday morning as the market looked forward to a week full of international and local data. Its trade was mostly range bound for the rest of the day yesterday, and has been most of the morning today, trading around the R10.7380/USD level.
Local news
The Rand seems to be holding well at the moment especially considering the on-going platinum strike which is now into its eighth week, the first of the Eskom electricity blackouts last week as well as the political tension in the Ukraine. Investors will be hoping for positive inflation data for February and retail sales data from January, both due for release this week, to keep the Rand supported.
International news
There is a string of US data due for release this week, but the main risk to emerging markets will be the release of the FOMC decision tomorrow and any increased tension in the Ukraine. Meanwhile the EUR remains firmer against the GBP today despite poor investor confidence out of Germany, the Eurozones largest economy.
TODAYS KEY DATA POINTS (GMT):
• 09:30 SA Non-farm payrolls y/y
• 10:00 DE ZEW economic sentiment
• 10:00 EZ ZEW economic sentiment
• 11:00 RU Russian president Putin speaks
• 12:30 US Housing Starts
• 12:30 US Building permits
• 12:30 US CPI y/y
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ZAR outlook
USD/ZAR expected range: 10.7000 – 10.8400
The ZAR dipped slightly yesterday morning as the market looked forward to a week full of international and local data. Its trade was mostly range bound for the rest of the day yesterday, and has been most of the morning today, trading around the R10.7380/USD level.
Local news
The Rand seems to be holding well at the moment especially considering the on-going platinum strike which is now into its eighth week, the first of the Eskom electricity blackouts last week as well as the political tension in the Ukraine. Investors will be hoping for positive inflation data for February and retail sales data from January, both due for release this week, to keep the Rand supported.
International news
There is a string of US data due for release this week, but the main risk to emerging markets will be the release of the FOMC decision tomorrow and any increased tension in the Ukraine. Meanwhile the EUR remains firmer against the GBP today despite poor investor confidence out of Germany, the Eurozones largest economy.
TODAYS KEY DATA POINTS (GMT):
• 09:30 SA Non-farm payrolls y/y
• 10:00 DE ZEW economic sentiment
• 10:00 EZ ZEW economic sentiment
• 11:00 RU Russian president Putin speaks
• 12:30 US Housing Starts
• 12:30 US Building permits
• 12:30 US CPI y/y
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Monday, 17 March 2014
Rand dips ahead of data filled week
Trade report 17/03/2014
ZAR outlook
USD/ZAR expected range: 10.6100 – 10.7500
The ZAR finished off last week as one of the top EM performers with dollar weakness against the EUR helping the local currency. Another factor that helped the Rand was the smaller than anticipated current account balance as a percentage of GDP, although at more than 5% there is still much room for improvement. Despite last week’s performance the Rand dropped 0.2% this morning to R10.6900/USD by 06:30GMT, from its close in New York of R10.6900/USD on Friday evening.
Local news
Economists expect international sentiment to drive the markets this week, although there is also much data due for release locally. Feb CPI numbers and Jan retail sales data are due out on Wednesday with a slight increase expected for inflation, and a slowdown in retail sales. Meanwhile the platinum sector strike is entering its eighth week and while it has little impact on day-to-day trading, will more than likely affect growth data further down the line.
International news
Investors will be closely watching political tensions in Ukraine and Russia this week and the outcome of Sundays Crimea referendum and potential economic sanctions from the EU/US against Russia. Also in the news will be the FOMC decision after close of SA trade on Wednesday, with investors expecting another taper of $10bn, which will increase pressure on the ZAR and other emerging market currencies.
TODAYS KEY DATA POINTS (GMT):
• 10:00 EZ CPI y/y (final)
• 12:30 US Empire manufacturing
• 13:00 US Net long term TIC flows
• 13:15 US Industrial production m/m
• 13:15 US Manufacturing production m/m
• 14:00 US NAHB Housing market index
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ZAR outlook
USD/ZAR expected range: 10.6100 – 10.7500
The ZAR finished off last week as one of the top EM performers with dollar weakness against the EUR helping the local currency. Another factor that helped the Rand was the smaller than anticipated current account balance as a percentage of GDP, although at more than 5% there is still much room for improvement. Despite last week’s performance the Rand dropped 0.2% this morning to R10.6900/USD by 06:30GMT, from its close in New York of R10.6900/USD on Friday evening.
Local news
Economists expect international sentiment to drive the markets this week, although there is also much data due for release locally. Feb CPI numbers and Jan retail sales data are due out on Wednesday with a slight increase expected for inflation, and a slowdown in retail sales. Meanwhile the platinum sector strike is entering its eighth week and while it has little impact on day-to-day trading, will more than likely affect growth data further down the line.
International news
Investors will be closely watching political tensions in Ukraine and Russia this week and the outcome of Sundays Crimea referendum and potential economic sanctions from the EU/US against Russia. Also in the news will be the FOMC decision after close of SA trade on Wednesday, with investors expecting another taper of $10bn, which will increase pressure on the ZAR and other emerging market currencies.
TODAYS KEY DATA POINTS (GMT):
• 10:00 EZ CPI y/y (final)
• 12:30 US Empire manufacturing
• 13:00 US Net long term TIC flows
• 13:15 US Industrial production m/m
• 13:15 US Manufacturing production m/m
• 14:00 US NAHB Housing market index
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Friday, 14 March 2014
EMs range bound after volatile week
Trade report 14/03/2014
ZAR outlook
USD/ZAR expected range: 10.7400 – 10.8900
Better than expected local manufacturing data and a stronger EUR helped the Rand strengthen yesterday afternoon, but the currency slipped again this morning as investors show concerns over growth in China, the world’s second largest economy. The ZAR was trading at R10.8280/USD at 06:51GMT this morning, down 0.2% from its close of R10.8050 in New York yesterday evening.
Local news
Manufacturing data came in better than expected yesterday, although economists warn that growth of 2.5% still needs much improvement, especially with China experiencing a growth slowdown. Mining data disappointed yesterday which was to be expected. Production dropped from 12.2% y/y to 3.1% y/y and with on-going strike action these figures will most probably be affected through Q1 as well. SARB governor Marcus made comments last night that suggest that the markets expectations of big interest rate hikes are overdone, which may keep pressure on the local currency.
International news
Emerging market currencies have been feeling the pressure this week of investors nervous about the economic slowdown in China and the escalating uncertainty in the Ukraine area. This has caused much volatility in the markets, although EM currencies are presently mostly range-bound and waiting for further direction from international events and data releases, as dealers generally feel the selling was overdone.
TODAYS KEY DATA POINTS (GMT):
• 09:30 SA ILB auction
• 07:00 DE CPI y/y (final)
• 09:30 GB Visible trade balance (GBP)
• 12:30 US PPI final demand y/y
• 13:55 US Michigan consumer confidence (preliminary)
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ZAR outlook
USD/ZAR expected range: 10.7400 – 10.8900
Better than expected local manufacturing data and a stronger EUR helped the Rand strengthen yesterday afternoon, but the currency slipped again this morning as investors show concerns over growth in China, the world’s second largest economy. The ZAR was trading at R10.8280/USD at 06:51GMT this morning, down 0.2% from its close of R10.8050 in New York yesterday evening.
Local news
Manufacturing data came in better than expected yesterday, although economists warn that growth of 2.5% still needs much improvement, especially with China experiencing a growth slowdown. Mining data disappointed yesterday which was to be expected. Production dropped from 12.2% y/y to 3.1% y/y and with on-going strike action these figures will most probably be affected through Q1 as well. SARB governor Marcus made comments last night that suggest that the markets expectations of big interest rate hikes are overdone, which may keep pressure on the local currency.
International news
Emerging market currencies have been feeling the pressure this week of investors nervous about the economic slowdown in China and the escalating uncertainty in the Ukraine area. This has caused much volatility in the markets, although EM currencies are presently mostly range-bound and waiting for further direction from international events and data releases, as dealers generally feel the selling was overdone.
TODAYS KEY DATA POINTS (GMT):
• 09:30 SA ILB auction
• 07:00 DE CPI y/y (final)
• 09:30 GB Visible trade balance (GBP)
• 12:30 US PPI final demand y/y
• 13:55 US Michigan consumer confidence (preliminary)
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Thursday, 13 March 2014
ZAR recovers after shaky start to the week
Trade report 13/03/2014
ZAR outlook
USD/ZAR expected range: 10.7000 – 10.8500
The ZAR has been under pressure most of the week so far and even fell to a two week low as concerns over growth in China and tensions in the Ukraine unnerved investors. Today the ZAR has managed to recover slightly and is holding steady ahead of local and US data releases as investor sentiment has improved. The Rand was trading at R10.7850 /USD at 06:34GMT this morning, slightly firmer than its close in New York yesterday of R10.8005/USD.
Local news
The local current account deficit has narrowed from 6.4% in Q3 to 5.1% in Q4 which exceeded expectations by 0.4%, although it must be noted that a deficit of more than 5% to GDP is still considered pronounced and there was thus little reaction in the markets. Today sees the release of mining and manufacturing production data. The mining data may be a risk to the currency as recent strike action will most likely have a negative effect on the results.
International news
Despite recent concern over tension in the Ukraine, global sentiment to emerging markets assets has dramatically improved with strong rises in the Asian markets, and Turkey making solid gains despite fresh protest action in the area. Meanwhile the AUD has strengthened against the EUR after Australia posted impressive employment data, the biggest increase in over 12 years.
TODAYS KEY DATA POINTS (GMT):
• 07:00 SA SARB Deputy Gov. Mminele speaks
• 09:30 SA Mining production y/y
• 11:00 SA Manufacturing production n.s.a y/y
• 16:30 SA SARB Gov. Marcus speaks
• 12:30 US Advance retail sales
• 12:30 US Initial jobless claims
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ZAR outlook
USD/ZAR expected range: 10.7000 – 10.8500
The ZAR has been under pressure most of the week so far and even fell to a two week low as concerns over growth in China and tensions in the Ukraine unnerved investors. Today the ZAR has managed to recover slightly and is holding steady ahead of local and US data releases as investor sentiment has improved. The Rand was trading at R10.7850 /USD at 06:34GMT this morning, slightly firmer than its close in New York yesterday of R10.8005/USD.
Local news
The local current account deficit has narrowed from 6.4% in Q3 to 5.1% in Q4 which exceeded expectations by 0.4%, although it must be noted that a deficit of more than 5% to GDP is still considered pronounced and there was thus little reaction in the markets. Today sees the release of mining and manufacturing production data. The mining data may be a risk to the currency as recent strike action will most likely have a negative effect on the results.
International news
Despite recent concern over tension in the Ukraine, global sentiment to emerging markets assets has dramatically improved with strong rises in the Asian markets, and Turkey making solid gains despite fresh protest action in the area. Meanwhile the AUD has strengthened against the EUR after Australia posted impressive employment data, the biggest increase in over 12 years.
TODAYS KEY DATA POINTS (GMT):
• 07:00 SA SARB Deputy Gov. Mminele speaks
• 09:30 SA Mining production y/y
• 11:00 SA Manufacturing production n.s.a y/y
• 16:30 SA SARB Gov. Marcus speaks
• 12:30 US Advance retail sales
• 12:30 US Initial jobless claims
Foreign exchange South Africa – Let one of our professional consultants at Currency Solutions assist you. To know more about how we can help you Contact Us
Want to know where the markets are? View our Live Currency Rates
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