ZAR outlook
USD/ZAR expected range: 10.1900 – 10.3500
The Rand strengthened slightly against the dollar on Monday as the USD comeback was slowed by poor US new home sales data released. This should help the ZAR for the moment, but the currency could be hit by looming strikes during the weeks ahead.
Local news
Since Brazil announced a $60bn currency intervention program on Friday the EM currencies have rallied. An increase in South African interest rates would certainly help the ZAR internationally, but analysts do not expect the Reserve Bank will follow its EM peers just yet. Combined with the on-going strikes and now the construction and transport sectors also threatening to down tools, investor confidence in the Rand remains low and it remains one of the worst performing EMs.
International news
Markets will be keeping a close eye on any data relating to the next FOMC meeting being held in September, as talk increases over the Feds quantitative easing tapering activities. Investors in the meantime are likely to maintain a cautious outlook on the ZAR as well as all emerging markets.
TODAYS KEY DATA POINTS:
7am: SA earnings (SUI, ADH
2.30pm: US July Durables (-4% m/m)
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