Trade report 20/05/2013
The South Africa Reserve Bank (SARB) will be meeting to decide on interest rates later this week. Commodity prices remain on the defensive and gold has lost ground in eight consecutive trading sessions. The combination of falling inflation, waning global growth and a resurgence in the USD all influence the gold price. The rand is at a four year low against the dollar and the USD-ZAR could be heading to levels close to 9.5000 in this trading session, but strong resistance will most likely be encountered around 9.44 which is a trend line resistance level.
Bank of England governor Sir Mervyn King stifled the British Treasury’s excitement over “increasing momentum” in the economy. The Bank Governor warned Chancellor George Osborne that his policy to stimulate the housing market could cause future problems. Sir Mervyn said that Mr Osborne’s Help To Buy scheme was “too close for comfort” to the US mortgage guarantee schemes that caused the financial crisis and should not be allowed to become permanent.
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