Trade report 20/08/2013
USD/ZAR expected range: 10.10-10.30
The Rand has experienced a renewed bout of
negative investor sentiment even though there has been been no significant data
releases or events from an International perspective which should have caused
the volatility. Continued labour issues has again put the Rand under pressure.
Local news
The main local news has not been of data releases but rather the
renewed threats of strike action in multiple industrial sections such as mining
and automotive sector. With the latter having already threatened to down tools,
the impact of the automotive industry going on strike would have severe
consequences not only for the reputation of the SA automotive industry but
could cause lost production and revenue of up to R700million a day.
International news
There has been speculation that the US could increase their interest
rates, the effect of the US raising their interest rates does not seem like a
significant event for the Rand. Unfortunately it could have a serious impact as
it means that the differential in the carry over trade would decrease meaning
more investors would pull money from EM currencies and put the funds back into
safe haven assets such as the USD or EUR. This could cause the Rand to lose
even further ground.
TODAYS KEY DATA POINTS:
- 7am: SA earnings (BIL, SHP, SPG, BLU, SAC), Europe earnings (Glencore Xstrata)
- 2.30pm: US July Chicago Fed Activity (-0.10)
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