Trade report 04/06/2013
The rand was weaker across the board at noon‚ giving up early gains ahead of the eagerly awaited release of South African trade data at 14:00 this afternoon. “Trade balance data could end the recent bout of rand short covering. Although the rand did enjoy some broad-based short covering on Thursday‚ it also benefited from a more risk-on global trading environment and associated weaker US dollar backdrop‚” wrote Absa Capital analysts in a note. The USD-ZAR is expected to trade at 9.90-10.500.
In international news, new steps to combat youth unemployment and help lending to struggling small business were agreed upon by European Union leaders on Thursday. Over the next two years 27 leaders have committed to spend €6bn to support job creation, and to use unspent EU budget funds to keep the efforts going thereafter.
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Friday 28 June 2013
Thursday 27 June 2013
ZAR underlying sentiment bearish
Trade report 04/06/2013
The rand was firmer in early trade on Thursday, supported by the short-term flows ahead of the end of the financial quarter, but traders said the underlying sentiment remained bearish. The highlights of the day for traders will be the May producer price inflation data and the results of the inflation expectation survey from the Bureau for Economic Research. The USD-ZAR is expected to trade at 10.00-10.20 today.
Whilst peaking at a FM top Companies awards function Reserve Bank governor Gill Marcus said on Tuesday that if the economic environment does not get any worse it will most likely still take a number of years before output gaps are fully closed and the world is back to normal growth. “The economic environment is a difficult one. The world is in its sixth year of crisis: a crisis that has repeatedly mutated‚ shifting its epicentre from a sub-prime crisis to systemic banking crisis; a liquidity‚ fiscal deficit and sovereign debt crisis,” said Marcus.
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The rand was firmer in early trade on Thursday, supported by the short-term flows ahead of the end of the financial quarter, but traders said the underlying sentiment remained bearish. The highlights of the day for traders will be the May producer price inflation data and the results of the inflation expectation survey from the Bureau for Economic Research. The USD-ZAR is expected to trade at 10.00-10.20 today.
Whilst peaking at a FM top Companies awards function Reserve Bank governor Gill Marcus said on Tuesday that if the economic environment does not get any worse it will most likely still take a number of years before output gaps are fully closed and the world is back to normal growth. “The economic environment is a difficult one. The world is in its sixth year of crisis: a crisis that has repeatedly mutated‚ shifting its epicentre from a sub-prime crisis to systemic banking crisis; a liquidity‚ fiscal deficit and sovereign debt crisis,” said Marcus.
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Wednesday 26 June 2013
ZAR weakness due to Mandela's health is overplayed
Trade report 26/06/2013
The threat of sustained ZAR weakness due to former President Nelson Mandela’s ill health is overplayed. Whilst Mr. Mandela is a global icon, he has not played a significant role in politics for over a decade. Whilst Mr. Mandela’s passing will be very sad when it occurs, sustained ZAR weakness would be unjustified. The fundamental justification for the ZAR vulnerability is however the massive imbalances that SA continues to have and the over-reliance on foreign investors and inflows to keep these imbalances financed. The USD-ZAR is expected to trade at 10.00-10.2500.
On Tuesday the Association of Mineworkers and Construction Union (Amcu) demanded a 100% pay increase for all unskilled and semi-skilled employees in the South African gold mining sector. The wage demand was enclosed in a detailed memorandum to the Chamber of Mines. The demand for a 100% wage increase is seen as a direct challenge to the 60% increase that rival union National Union of Mineworkers (NUM) demanded last month.
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The threat of sustained ZAR weakness due to former President Nelson Mandela’s ill health is overplayed. Whilst Mr. Mandela is a global icon, he has not played a significant role in politics for over a decade. Whilst Mr. Mandela’s passing will be very sad when it occurs, sustained ZAR weakness would be unjustified. The fundamental justification for the ZAR vulnerability is however the massive imbalances that SA continues to have and the over-reliance on foreign investors and inflows to keep these imbalances financed. The USD-ZAR is expected to trade at 10.00-10.2500.
On Tuesday the Association of Mineworkers and Construction Union (Amcu) demanded a 100% pay increase for all unskilled and semi-skilled employees in the South African gold mining sector. The wage demand was enclosed in a detailed memorandum to the Chamber of Mines. The demand for a 100% wage increase is seen as a direct challenge to the 60% increase that rival union National Union of Mineworkers (NUM) demanded last month.
To read the full report, visit the Currency Solutions website. Foreign exchange South Africa – Let one of our professional consultants at assist you in securing the best foreign exchange Cape Town. To know more about how we can help you Contact Us.
Tuesday 25 June 2013
Firmer rand
Trade report 25/06/2013
The rand was firmer at midday on Tuesday, having reached an intraday best level of R9.91 to the dollar, and was awaiting direction from the release of several sets of US economic data due later in the afternoon. "The rand is a price taker, caught in a spiral of reacting to global economic releases," a local trader said. The USD-ZAR is expected to trade at 9.95-10.1500.
In local news; "investment in skills development should be at the centre of our attempts to build a green economy," said Deputy President Kgalema Motlanthe said on Monday at a Green Economy National Youth Summit in Cape Town. He went on to say that; "all these efforts and initiatives should be aligned to prioritising localisation of energy products and services." Mr. Motlanthe said that focus areas for training and capacity building included energy auditing, manufacturing, installation, and maintenance.
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The rand was firmer at midday on Tuesday, having reached an intraday best level of R9.91 to the dollar, and was awaiting direction from the release of several sets of US economic data due later in the afternoon. "The rand is a price taker, caught in a spiral of reacting to global economic releases," a local trader said. The USD-ZAR is expected to trade at 9.95-10.1500.
In local news; "investment in skills development should be at the centre of our attempts to build a green economy," said Deputy President Kgalema Motlanthe said on Monday at a Green Economy National Youth Summit in Cape Town. He went on to say that; "all these efforts and initiatives should be aligned to prioritising localisation of energy products and services." Mr. Motlanthe said that focus areas for training and capacity building included energy auditing, manufacturing, installation, and maintenance.
To read the full report, visit the Currency Solutions website. Foreign exchange South Africa – Let one of our professional consultants at assist you in securing the best foreign exchange Cape Town. To know more about how we can help you Contact Us.
Friday 21 June 2013
Rand recovers slightly
Trade report 21/06/2013
The dependence of financial markets on the behavior of central banks became abundantly clear yesterday. We have known for some time that the accommodative stance of the central banks would cause distortions the financial markets, but the scale of these distortions are only now becoming clear. There is not much data scheduled for release today and could see some calm return. The USD-ZAR is expected to trade at10.15-10.3000.
In international news business surveys released on Thursday showed that the slump in the Eurozone private –sector eased more the expected in June, but a continued reduction in new orders indicates that a full recovery is not yet in the cards. Markit’s flash eurozone composite purchasing managers index (PMI), a reliable economic growth indicator for the bloc, rose to 48.9 in June from May’s 47.7.
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The dependence of financial markets on the behavior of central banks became abundantly clear yesterday. We have known for some time that the accommodative stance of the central banks would cause distortions the financial markets, but the scale of these distortions are only now becoming clear. There is not much data scheduled for release today and could see some calm return. The USD-ZAR is expected to trade at10.15-10.3000.
In international news business surveys released on Thursday showed that the slump in the Eurozone private –sector eased more the expected in June, but a continued reduction in new orders indicates that a full recovery is not yet in the cards. Markit’s flash eurozone composite purchasing managers index (PMI), a reliable economic growth indicator for the bloc, rose to 48.9 in June from May’s 47.7.
To read the full report, visit the Currency Solutions website. Foreign exchange South Africa – Let one of our professional consultants at assist you in securing the best foreign exchange Cape Town. To know more about how we can help you Contact Us.
Thursday 20 June 2013
Rand weakens as yields hit year high
Trade report 04/06/2013
The rand extended its overnight fall in early Thursday morning trade after the US Federal reserve beckoned an end to its stimulus programme, which has boosted appetite for high yielding emerging market currencies such as the rand. The rand was at R10.2455/$ at 08:41, 0.54% weaker than its New York close and a sharp drop from R9.91, its strongest level in Wednesday trade. The USD-ZAR is expected to trade at 10.15-10.3500.
The current account deficit narrowed to 5.8% of gross domestic profit (GDP) in the first quarter of this year down from the 6.5% of GDP in the fourth quarter of 2012. The Reserve Bank’s June quarterly bulletin released on Wednesday showed that the account deficit narrowed from R212.6bn to R190.9bn. A consensus done by BDlive forecasted for a deficit of 7% of GDP, thus the results were much better than expected.
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Wednesday 19 June 2013
Rand flat while awaiting account deficit data
Trade report 04/06/2013
ZAR outlook
As the market awaits current account and consumer inflation data due for release later today the rand was flat at around R10/$ in early Wednesday trade. The quarterly bulletin released by the South African Reserve Bank contains data on household consumption expenditure and fixed capital formation. The most anticipated‚ however‚ will be the current account deficit data‚ as it has implications for the rand.
In international news a bigger than expected drop in second-quarter earnings was posted by the worlds second largest fashion retailer, H&M. The drop in sales can be attributed to low consumer morale and bad weather in its main European market. The Swedish retailer said that although sales got off to a good start in June their inventory heading into the third quarter is bigger than was planned and the situation remains challenging in many of its major markets.
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ZAR outlook
As the market awaits current account and consumer inflation data due for release later today the rand was flat at around R10/$ in early Wednesday trade. The quarterly bulletin released by the South African Reserve Bank contains data on household consumption expenditure and fixed capital formation. The most anticipated‚ however‚ will be the current account deficit data‚ as it has implications for the rand.
In international news a bigger than expected drop in second-quarter earnings was posted by the worlds second largest fashion retailer, H&M. The drop in sales can be attributed to low consumer morale and bad weather in its main European market. The Swedish retailer said that although sales got off to a good start in June their inventory heading into the third quarter is bigger than was planned and the situation remains challenging in many of its major markets.
To read the full report, visit the Currency Solutions website. Foreign exchange South Africa – Let one of our professional consultants at assist you in securing the best foreign exchange Cape Town. To know more about how we can help you Contact Us.
Tuesday 18 June 2013
Rand softer after long weekend
Trade report 18/06/2013
South Africa’s high levels of violent crimes are a big problem and the government has acknowledged that it is having a significant negative impact on the country’s economy. According to government’s green paper on policing that has recently been released, violent crime was inhibiting South Africans from contributing economically and socially in the country.
The Daily newspaper reported on Monday that documents leaked by Edward Snowden, a former US spy, appear to show that Britain spied on foreign delegates from Turkey and South Africa at the 2009 London G-20 meetings. Ground-breaking intelligence capabilities were used to monitor communications between officials at the two G-20 meetings in 2009.
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South Africa’s high levels of violent crimes are a big problem and the government has acknowledged that it is having a significant negative impact on the country’s economy. According to government’s green paper on policing that has recently been released, violent crime was inhibiting South Africans from contributing economically and socially in the country.
The Daily newspaper reported on Monday that documents leaked by Edward Snowden, a former US spy, appear to show that Britain spied on foreign delegates from Turkey and South Africa at the 2009 London G-20 meetings. Ground-breaking intelligence capabilities were used to monitor communications between officials at the two G-20 meetings in 2009.
To read the full report, visit the Currency Solutions website. Transferring funds out of South Africa or money transfers into South Africa – Let one of our professional consultants at assist you in securing the best foreign exchange Cape Town. To know more about how we can help you Contact Us.
Friday 14 June 2013
Slightly weaker rand on poor domestic outlook
Trade report 14/06/2013
The rand gave back some of its recent gains in Friday trade, as investors contemplated a weak domestic outlook and uncertainty over the future of US market stimulus. In early Tuesday trade it sank to its weakest level since 2009, before staging a recovery that some believe lacked any solid underpin as the domestic outlook remains dreary. The USD-ZAR is expected to trade at 9.80 – 10.0000.
In international news, US retail sales rose 0.6 precent in May from April and the number of Americans seeking unemployment benefits fell by 12 000 last week to a seasonally adjusted 334 000. Economists believe this decline suggests steady job gains will endure. The four week average decreased by 7250 to 345 250 the US Labor Department said on Thursday.
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The rand gave back some of its recent gains in Friday trade, as investors contemplated a weak domestic outlook and uncertainty over the future of US market stimulus. In early Tuesday trade it sank to its weakest level since 2009, before staging a recovery that some believe lacked any solid underpin as the domestic outlook remains dreary. The USD-ZAR is expected to trade at 9.80 – 10.0000.
In international news, US retail sales rose 0.6 precent in May from April and the number of Americans seeking unemployment benefits fell by 12 000 last week to a seasonally adjusted 334 000. Economists believe this decline suggests steady job gains will endure. The four week average decreased by 7250 to 345 250 the US Labor Department said on Thursday.
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Thursday 6 June 2013
Rand weaker ahead of Marcus speech
Trade report 04/06/2013
The rand breached the psychological key 10 level for the first time since its recovery earlier in the week. On Tuesday the South African Reserve Bank (SARB) said that recent economic data pointed toward growth projections being cut, while inflation could increase due to sharply rising labour costs. The weaker rand and bearish comments by SARB have also caused a selloff of Government bonds.
In international news an unofficial monthly survey in the UK economy’s biggest sector suggests that the dominant services sector grew at the fastest rate in more than a year in the month of May. The service industry’s unexpectedly strong purchasing managers’ index is the latest sign that the economy is growing after years of stagnation. According to Jens Larsen, an economist at RBC Capital Markets easy credit, stabilization in the Eurozone and declining inflation were amongst the reasons for the economy’s improvement.
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The rand breached the psychological key 10 level for the first time since its recovery earlier in the week. On Tuesday the South African Reserve Bank (SARB) said that recent economic data pointed toward growth projections being cut, while inflation could increase due to sharply rising labour costs. The weaker rand and bearish comments by SARB have also caused a selloff of Government bonds.
In international news an unofficial monthly survey in the UK economy’s biggest sector suggests that the dominant services sector grew at the fastest rate in more than a year in the month of May. The service industry’s unexpectedly strong purchasing managers’ index is the latest sign that the economy is growing after years of stagnation. According to Jens Larsen, an economist at RBC Capital Markets easy credit, stabilization in the Eurozone and declining inflation were amongst the reasons for the economy’s improvement.
To read the full report, visit the Currency Solutions website. Transferring funds out of South Africa or money transfers into South Africa – Let one of our professional consultants at assist you in securing the best foreign exchange Cape Town. To know more about how we can help you Contact Us.
Wednesday 5 June 2013
ZAR remains vulnerable
Trade report 04/06/2013
In the latest monetary review policy report released by the
South African Reserve Bank (SARB) on Tuesday, the recent moderation of food prices
may be reversed as the recent exchange rate movements have raised the
probability of further petrol and food increases. “The exchange rate poses an
upside risk to food inflation as prices of agricultural commodities such as
wheat and maize are based on international prices," a SARB representative
said.
In international news the European Union (EU) decided, on Tuesday,
to impose tariff increases as high as 67.9% on solar panels from China in an
attempt to revive a withering industry in Europe. The duties have been instated
as a way of punishing China for allegedly selling the panels in the Eurozone at
below cost price, a practice known as dumping. This particular case is the
largest trade case that the commission has taken on, with approximately €21bn of
China-made solar panels sold in the EU.
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Tuesday 4 June 2013
Rand gains 2.5%
Trade report 04/06/2013
In local news data released on Monday suggest that local manufacturers can expect a difficult time a head, despite the competitive edge exporters gained from the weaker rand. It is doubtful that the rand, like most emerging market currencies, will strengthen soon as long term global trends play out. The rand gained 2.5% to R9.8443/$ on Monday, and Mohammed Nalla, Nedbank Group head of strategic research said it "has been oversold for quite some time, and we’re … hoping for some consolidation".
In International news in the month of May one of the USA’s key manufacturing measures fell to its lowest level since June 2009. A pullback in business spending and the slumping overseas economy have reduced new orders and production. According to the Institute of Supply Management its index on manufacturing activity fell to 49 in May, down from the 50.7 in April. Making it the lowest level in four years and the first time it dipped below 50 since November. A reading of below 50 suggests economic contraction.
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In local news data released on Monday suggest that local manufacturers can expect a difficult time a head, despite the competitive edge exporters gained from the weaker rand. It is doubtful that the rand, like most emerging market currencies, will strengthen soon as long term global trends play out. The rand gained 2.5% to R9.8443/$ on Monday, and Mohammed Nalla, Nedbank Group head of strategic research said it "has been oversold for quite some time, and we’re … hoping for some consolidation".
In International news in the month of May one of the USA’s key manufacturing measures fell to its lowest level since June 2009. A pullback in business spending and the slumping overseas economy have reduced new orders and production. According to the Institute of Supply Management its index on manufacturing activity fell to 49 in May, down from the 50.7 in April. Making it the lowest level in four years and the first time it dipped below 50 since November. A reading of below 50 suggests economic contraction.
To read the full report, visit the Currency Solutions website. Transferring funds out of South Africa or money transfers into South Africa – Let one of our professional consultants at assist you in securing the best foreign exchange rates in Cape Town. To know more about how we can help you Contact Us.
Monday 3 June 2013
Gordhan believes ZAR is oversold
Trade report 03/06/2013
The new week has started and one can only hope that investors have had time to reflect on the movements in the ZAR of the past week. Finance Minister Pravin Gordhan made a statement of the weekend saying that the movements in the ZAR had been an overreaction. The ZAR has now, at least in the short term priced in a significant amount of bad news. The USD-ZAR is expected to trade at 9.95-10.1500 today.
“We are very confident that the rand will recover in time, that the markets have overreached themselves,” said Finance Minister Pravin Gordhan. Mr. Gordhan expressed his believe that the rand has been oversold and will recover after its drop to below R10.20 to the dollar on Friday. The minister went further to say that South African exporters should use the opportunity provided by the weaker rand to increase exports.
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The new week has started and one can only hope that investors have had time to reflect on the movements in the ZAR of the past week. Finance Minister Pravin Gordhan made a statement of the weekend saying that the movements in the ZAR had been an overreaction. The ZAR has now, at least in the short term priced in a significant amount of bad news. The USD-ZAR is expected to trade at 9.95-10.1500 today.
“We are very confident that the rand will recover in time, that the markets have overreached themselves,” said Finance Minister Pravin Gordhan. Mr. Gordhan expressed his believe that the rand has been oversold and will recover after its drop to below R10.20 to the dollar on Friday. The minister went further to say that South African exporters should use the opportunity provided by the weaker rand to increase exports.
To read the full report, visit the Currency Solutions website. Transferring funds out of South Africa or money transfers into South Africa – Let one of our professional consultants at assist you in securing the best foreign exchange rates in Cape Town. To know more about how we can help you Contact Us.
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