Trade report 26/09/2013
ZAR outlook
USD/ZAR expected range: 9.9000 – 10.0500
The ZAR is steady against the USD and was little changed this morning from its overnight close in New York of R9.9775/$. Concern was raised over the US budget and wording on the 2010 health-care law which could represent a risk to the US growth outlook. This put some pressure on the USD yesterday and helped the Rand stay firm.
Local news
Local PPI figures for August are due to be released today and may put pressure on the Rand if they reveal that inflation is building in Africa’s largest economy. Added to this there is a renewed threat of another mining strike which would hurt investor sentiment, as the Association of Mineworkers and Construction Union has announced it will strike on Friday to protest job cuts.
International news
The ZAR could also be put on the backfoot should US jobless claims data released later today come in stronger than expected. This would add to increasing speculation that the FED will start its QE tapering at its next meeting which would put pressure on not only the Rand, but all emerging market currencies.
TODAYS KEY DATA POINTS (GMT):
• 09:30 SA PPI y/y
• 09:30 SA Switch auction (R201s for R186s)
• 08:30 GB Current account balance (GBP)
• 08:30 GB GDP y/y (final)
• 12:30 US Initial jobless claims
• 12:30 US GDP q/q annualised (third reading)
• 12:30 US Personal consumption (third reading)
• 14:00 US Pending home sales y/y
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Thursday 26 September 2013
Wednesday 25 September 2013
Rand slightly firmer after quiet start to the week
Trade report 25/09/2013
ZAR outlook
USD/ZAR expected range: 9.8100 – 9.9500
The Rand has had a quiet week so far trading in a narrow range, amid low liquidity due to the local public holiday yesterday. It is trading slightly firmer against the USD this morning at around R9.8520/$, which is 0.2% up from its close in New York on Tuesday evening.
Local news
The ZAR remains one of the most volatile EM currencies having lost 2.9% to the USD on the week. An ABSA capital analyst is quoted as writing ‘We believe that the Rand remains vulnerable over the coming months, mainly because FED tapering has merely been delayed and South Africa’s fundamental landscape is likely to have deteriorated further by the time the FED actually starts tapering.’
International news
US economic data due to be released this week, including new home sales and durable goods orders, will be closely watched by the markets. Very positive data may be detrimental to the Rand as it will indicate a strengthening US economy and raise expectations that the FED will start QE tapering.
TODAYS KEY DATA POINTS (GMT):
• 07:00 SA Leading Indicator
• 09:30 SA Bond auction
• 09:30 SA Eskom bond auction (R200mn)
• 10:00 SA BER consumer confidence
• 11:00 US MBA mortgage applications
• 12:30 US Durable goods orders
• 14:00 US New home sales
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ZAR outlook
USD/ZAR expected range: 9.8100 – 9.9500
The Rand has had a quiet week so far trading in a narrow range, amid low liquidity due to the local public holiday yesterday. It is trading slightly firmer against the USD this morning at around R9.8520/$, which is 0.2% up from its close in New York on Tuesday evening.
Local news
The ZAR remains one of the most volatile EM currencies having lost 2.9% to the USD on the week. An ABSA capital analyst is quoted as writing ‘We believe that the Rand remains vulnerable over the coming months, mainly because FED tapering has merely been delayed and South Africa’s fundamental landscape is likely to have deteriorated further by the time the FED actually starts tapering.’
International news
US economic data due to be released this week, including new home sales and durable goods orders, will be closely watched by the markets. Very positive data may be detrimental to the Rand as it will indicate a strengthening US economy and raise expectations that the FED will start QE tapering.
TODAYS KEY DATA POINTS (GMT):
• 07:00 SA Leading Indicator
• 09:30 SA Bond auction
• 09:30 SA Eskom bond auction (R200mn)
• 10:00 SA BER consumer confidence
• 11:00 US MBA mortgage applications
• 12:30 US Durable goods orders
• 14:00 US New home sales
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Monday 23 September 2013
Rand firms after heavy Friday losses
Trade report 23/09/2013
ZAR outlook
USD/ZAR expected range: 9.7900 – 9.9400
Encouraging US jobless claims and US existing home sales data released on Friday helped the USD to rebound 3.1% after initial losses post the FOMC announcement last Wednesday evening. After incurring some heavy losses on Friday mainly due to this positive US data the ZAR has firmed against the USD in morning trade today and is trading around R9.84/$.
Local news
The Rand is currently one of the worst performing EM worldwide partly due to struggling negative sentiment created by the on-going local strike action. THE SARB also announced last week that it is maintaining the current low repo rate at 5% and while this is good news to consumers these low interest rates do not provide any buffer to the strength of the Rand.
International news
A recent strong factory survey from China has lifted commodity currencies that rely on exports to that country. This has helped the ZAR strengthen slightly this morning, although the market will now be looking to speculate on when the FOMC will start QE tapering. This will have investors paying keen interest to the FED member’s speeches that are scheduled for this week.
TODAYS KEY DATA POINTS (GMT):
• 12:30 US Chicago Fed activity index
• 12:58 US Markit PMI manufacturing
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ZAR outlook
USD/ZAR expected range: 9.7900 – 9.9400
Encouraging US jobless claims and US existing home sales data released on Friday helped the USD to rebound 3.1% after initial losses post the FOMC announcement last Wednesday evening. After incurring some heavy losses on Friday mainly due to this positive US data the ZAR has firmed against the USD in morning trade today and is trading around R9.84/$.
Local news
The Rand is currently one of the worst performing EM worldwide partly due to struggling negative sentiment created by the on-going local strike action. THE SARB also announced last week that it is maintaining the current low repo rate at 5% and while this is good news to consumers these low interest rates do not provide any buffer to the strength of the Rand.
International news
A recent strong factory survey from China has lifted commodity currencies that rely on exports to that country. This has helped the ZAR strengthen slightly this morning, although the market will now be looking to speculate on when the FOMC will start QE tapering. This will have investors paying keen interest to the FED member’s speeches that are scheduled for this week.
TODAYS KEY DATA POINTS (GMT):
• 12:30 US Chicago Fed activity index
• 12:58 US Markit PMI manufacturing
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Friday 20 September 2013
Rand softens as markets settle
Trade report 20/09/2013
ZAR outlook
USD/ZAR expected range: 9.6200 – 9.7800
The ZAR has pulled back slightly against the USD after the initial over-reaction to the FEDs surprise announcement on Wednesday that it was maintaining QE at the current levels for the meantime. At 08:47 this morning the ZAR was trading at 9.7010 to the USD, slightly softer than its close in New York on Thursday evening.
Local news
The good news for consumers is that the SARB has kept interest rates unchanged as was predicted. This is not necessarily good for the strength of the Rand however, as this loose monetary policy leaves the ZAR more exposed to external fluctuations in sentiment than its EM peers that have already tightened their monetary policies.
International news
The recent FOMC meeting is barely over and talk has already started about the next scheduled meeting in December and the decision over QE. Reserve Bank Governor Gill Marcus has cautioned that volatility linked to uncertainty around the Feds eventual tapering will keep emerging market currencies such as the Rand under pressure.
TODAYS KEY DATA POINTS (GMT):
• 09:30 SA ILB Auction
• 08:30 GB Public sector net borrowing
• 16:30 US Feds George speaks
• 16:55 US Feds Bullard speaks
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ZAR outlook
USD/ZAR expected range: 9.6200 – 9.7800
The ZAR has pulled back slightly against the USD after the initial over-reaction to the FEDs surprise announcement on Wednesday that it was maintaining QE at the current levels for the meantime. At 08:47 this morning the ZAR was trading at 9.7010 to the USD, slightly softer than its close in New York on Thursday evening.
Local news
The good news for consumers is that the SARB has kept interest rates unchanged as was predicted. This is not necessarily good for the strength of the Rand however, as this loose monetary policy leaves the ZAR more exposed to external fluctuations in sentiment than its EM peers that have already tightened their monetary policies.
International news
The recent FOMC meeting is barely over and talk has already started about the next scheduled meeting in December and the decision over QE. Reserve Bank Governor Gill Marcus has cautioned that volatility linked to uncertainty around the Feds eventual tapering will keep emerging market currencies such as the Rand under pressure.
TODAYS KEY DATA POINTS (GMT):
• 09:30 SA ILB Auction
• 08:30 GB Public sector net borrowing
• 16:30 US Feds George speaks
• 16:55 US Feds Bullard speaks
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Thursday 19 September 2013
Rand surges on FED announcement
Trade report 19/09/2013
ZAR outlook
USD/ZAR expected range: 9.4700 – 9.6500
The Rand has enjoyed near four month highs against the USD after the announcement of the FEDs surprise decision to maintain its asset-buying purchases at the current levels. The ZAR gained over 2% overnight, trading at 9.5660 to the dollar at 8.30 this morning. Economists were confident the FED would begin QE tapering and the announcement to the contrary has shocked markets wordwide.
Local news
The strengthening of the Rand over the last week has helped reduce losses to the USD from 19% a few weeks ago to 13%, which will definitely help ease policymakers concerns over rising imported price pressures. The SARB will also announce its interest rate decision today. Economists are fairly confident interest rates will remain unchanged for the time being despite inflation data exceeding the 3 – 6% target range.
International news
Emerging markets across the board have been buoyed by the FED’s decision to maintain QE at the current levels. Combined with the fact that Chinese growth sentiment has stabilised, EMs are expected to enjoy a period of accelerated growth at least for the short-term.
TODAYS KEY DATA POINTS (GMT):
• 04:00 SA TransUnion consumer credit index
• 13:00 SA SARB rate announcement
• 08:30 GB Retail sales excluding auto fuel y/y
• 12:30 US Initial jobless claims
• 12:30 US Current account balance (USD)
• 14:00 US Philadelphia Fed index
• 14:00 US Existing home sales
• 14:00 US Leading indicators
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ZAR outlook
USD/ZAR expected range: 9.4700 – 9.6500
The Rand has enjoyed near four month highs against the USD after the announcement of the FEDs surprise decision to maintain its asset-buying purchases at the current levels. The ZAR gained over 2% overnight, trading at 9.5660 to the dollar at 8.30 this morning. Economists were confident the FED would begin QE tapering and the announcement to the contrary has shocked markets wordwide.
Local news
The strengthening of the Rand over the last week has helped reduce losses to the USD from 19% a few weeks ago to 13%, which will definitely help ease policymakers concerns over rising imported price pressures. The SARB will also announce its interest rate decision today. Economists are fairly confident interest rates will remain unchanged for the time being despite inflation data exceeding the 3 – 6% target range.
International news
Emerging markets across the board have been buoyed by the FED’s decision to maintain QE at the current levels. Combined with the fact that Chinese growth sentiment has stabilised, EMs are expected to enjoy a period of accelerated growth at least for the short-term.
TODAYS KEY DATA POINTS (GMT):
• 04:00 SA TransUnion consumer credit index
• 13:00 SA SARB rate announcement
• 08:30 GB Retail sales excluding auto fuel y/y
• 12:30 US Initial jobless claims
• 12:30 US Current account balance (USD)
• 14:00 US Philadelphia Fed index
• 14:00 US Existing home sales
• 14:00 US Leading indicators
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Wednesday 18 September 2013
Fed Meeting today, Rand holding steady
Trade report 18/09/2013
ZAR outlook
USD/ZAR expected range: 9.7000 – 9.8800
The Rand remained steady against the USD yesterday. This morning the local currency was trading at around R9.8045/$ although traders expect volatility to pick up ahead of the much anticipated FOMC news conference later on today. The Fed can mechanically afford to introduce QE tapering but economists believe the degree of tapering will be modest.
Local news
The most immediate threat to the ZAR is the outcome of the FOMC meeting which will be revealed later today. Domestic inflation data is due out today with economists predicting inflation to have risen slightly out of the 3-6% desired target. Despite this softer data it is thought to be unlikely that the SARB will raise interest rates at its next meeting tomorrow.
International news
It is interesting to note that the market has not been overly volatile in the few days build up to the FOMC meeting. The ZAR has been trading in the predicted range and EM currencies have generally remained steady. This is a good indication that despite all the worry caused by the prospect of QE tapering, investor risk appetite is still prevalent.
TODAYS KEY DATA POINTS (GMT):
• 08:00 SA CPI y/y
• 11:00 SA Retail sales constant y/y
• 08:30 GB BoE releases MPC minutes
• 12:30 US Housing starts
• 12:30 US Building permits
• 18:00 US FOMC decision
• 18:00 US Fed releases summary of economic projections
• 18:30 US Fed’s Bernanke holds press conference
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ZAR outlook
USD/ZAR expected range: 9.7000 – 9.8800
The Rand remained steady against the USD yesterday. This morning the local currency was trading at around R9.8045/$ although traders expect volatility to pick up ahead of the much anticipated FOMC news conference later on today. The Fed can mechanically afford to introduce QE tapering but economists believe the degree of tapering will be modest.
Local news
The most immediate threat to the ZAR is the outcome of the FOMC meeting which will be revealed later today. Domestic inflation data is due out today with economists predicting inflation to have risen slightly out of the 3-6% desired target. Despite this softer data it is thought to be unlikely that the SARB will raise interest rates at its next meeting tomorrow.
International news
It is interesting to note that the market has not been overly volatile in the few days build up to the FOMC meeting. The ZAR has been trading in the predicted range and EM currencies have generally remained steady. This is a good indication that despite all the worry caused by the prospect of QE tapering, investor risk appetite is still prevalent.
TODAYS KEY DATA POINTS (GMT):
• 08:00 SA CPI y/y
• 11:00 SA Retail sales constant y/y
• 08:30 GB BoE releases MPC minutes
• 12:30 US Housing starts
• 12:30 US Building permits
• 18:00 US FOMC decision
• 18:00 US Fed releases summary of economic projections
• 18:30 US Fed’s Bernanke holds press conference
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Tuesday 17 September 2013
Rand steady ahead of FOMC meeting
Trade report 17/09/2013
ZAR outlook
USD/ZAR expected range: 9.7500 – 9.9200
The Rand gained nearly 1.2% against the USD in trading on Monday, and this morning slipped only 0.3% to 9.8310 to the USD. European data due to be released today shouldn’t hold any significant value, so traders are confident of a narrow range of trading for the day, ahead of the much anticipated FOMC meeting scheduled for tomorrow.
Local news
Investors appear to have been de-sensitised to the local gloom of on-going strike action as international news takes priority. The uncertainty over the FOMC meeting this week has allowed the Rand to see surprising gains. SA retail sales and CPI data is due out this week, but will unlikely have much impact on the ZAR as investors focus on whether or not QE tapering will be implemented.
International news
Emerging markets worldwide have benefited from the FEDs monthly bond purchasing programme which the central bank may start scaling back as the US shows signs of economic recovery. Despite this, EM currencies have enjoyed a period of significant gains, although tomorrow may see the start of renewed volatility in the markets as investors react to the outcome of the FOMC meeting.
TODAYS KEY DATA POINTS (GMT):
• 09:30 SA Bond auction
• 09:30 SA Non-farm payrolls y/y
• 08:30 GB CPI y/y
• 12:30 US CPI y/y
• 14:00 US NAHB Housing market index
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ZAR outlook
USD/ZAR expected range: 9.7500 – 9.9200
The Rand gained nearly 1.2% against the USD in trading on Monday, and this morning slipped only 0.3% to 9.8310 to the USD. European data due to be released today shouldn’t hold any significant value, so traders are confident of a narrow range of trading for the day, ahead of the much anticipated FOMC meeting scheduled for tomorrow.
Local news
Investors appear to have been de-sensitised to the local gloom of on-going strike action as international news takes priority. The uncertainty over the FOMC meeting this week has allowed the Rand to see surprising gains. SA retail sales and CPI data is due out this week, but will unlikely have much impact on the ZAR as investors focus on whether or not QE tapering will be implemented.
International news
Emerging markets worldwide have benefited from the FEDs monthly bond purchasing programme which the central bank may start scaling back as the US shows signs of economic recovery. Despite this, EM currencies have enjoyed a period of significant gains, although tomorrow may see the start of renewed volatility in the markets as investors react to the outcome of the FOMC meeting.
TODAYS KEY DATA POINTS (GMT):
• 09:30 SA Bond auction
• 09:30 SA Non-farm payrolls y/y
• 08:30 GB CPI y/y
• 12:30 US CPI y/y
• 14:00 US NAHB Housing market index
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Monday 16 September 2013
Rand reaches five week high
Trade report 16/09/2013
ZAR outlook
USD/ZAR expected range: 9.7000 – 9.9800
US data released on Friday came in softer than expected. This has helped the ZAR reach a 5 week high against the USD this morning, reaching 9.8165 against the dollar by 08.51GMT and looking to improve throughout the morning. Speculation that the US Federal Reserve could maintain an accommodative stance towards QE tapering has been a boost to the majority of emerging markets.
Local news
Strike action continues to hamper SA business, including the auto-motive components sector strike which has just about brought the sector to a standstill. But thankfully these issues seem to be overshadowed by international sentiment at the moment. General feeling is also that the SARB will keep interest rates unchanged. This will be good news to local consumers but may leave the ZAR exposed as real interest rates remain negative.
International news
The ZAR is currently enjoying 5 week highs as general market feeling is that the FED will take a gentle stance towards QE tapering after disappointing payroll and retail sales data was released on Friday. But the ZAR’s gains could be short-lived as some traders still expect the FED to reduce its bond purchases by $15bn. With the FOMC meeting on Wednesday it should be an interesting week for the ZAR and all EM currencies.
TODAYS KEY DATA POINTS (GMT):
• 12:30 US Empire manufacturing
• 13:15 US Industrial production
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ZAR outlook
USD/ZAR expected range: 9.7000 – 9.9800
US data released on Friday came in softer than expected. This has helped the ZAR reach a 5 week high against the USD this morning, reaching 9.8165 against the dollar by 08.51GMT and looking to improve throughout the morning. Speculation that the US Federal Reserve could maintain an accommodative stance towards QE tapering has been a boost to the majority of emerging markets.
Local news
Strike action continues to hamper SA business, including the auto-motive components sector strike which has just about brought the sector to a standstill. But thankfully these issues seem to be overshadowed by international sentiment at the moment. General feeling is also that the SARB will keep interest rates unchanged. This will be good news to local consumers but may leave the ZAR exposed as real interest rates remain negative.
International news
The ZAR is currently enjoying 5 week highs as general market feeling is that the FED will take a gentle stance towards QE tapering after disappointing payroll and retail sales data was released on Friday. But the ZAR’s gains could be short-lived as some traders still expect the FED to reduce its bond purchases by $15bn. With the FOMC meeting on Wednesday it should be an interesting week for the ZAR and all EM currencies.
TODAYS KEY DATA POINTS (GMT):
• 12:30 US Empire manufacturing
• 13:15 US Industrial production
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Friday 13 September 2013
Fed meeting creates market jitters
Trade report 13/09/2013
ZAR outlook
USD/ZAR expected range: 9.9100 –10.0700
The ZAR was trading at 9.9715 at 06:36 GMT this morning – only slightly softer than it’s close in NYC last night. Despite reaching a 4-week high this week traders are doubtful that the Rand will make any more significant gains today as the much anticipated FOMC meeting is scheduled for next week, and this has investors nervous about the start of QE tapering.
Local news
SA mining and production data was released this week and both showed improvements of 5% y/y and 0.6% y/y respectively. This failed to impact significantly on the ZAR however, as investors are not confident this will be sustained, especially with the recent gold mining strike and other various on-going strikes affecting the economy further down the line.
International news
US data over jobless claims was not accurate as two states failed to submit their figures on time. But today’s data on US retail sales will be closely watched ahead of next week’s FOMC meeting. The ZAR has enjoyed a relatively good week, but concerns over the withdrawal of investment from EMs if the FED starts QE tapering has traders expecting a volatile Rand in the days ahead.
TODAYS KEY DATA POINTS (GMT):
• 09:30 SA ILB Auction (800mn)
• 12:30 US PPI y/y
• 12:30 US Advice retail sales m/m
• 13:55 US Michigan consumer confidence (preliminary)
• 14:00 US Business inventories
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ZAR outlook
USD/ZAR expected range: 9.9100 –10.0700
The ZAR was trading at 9.9715 at 06:36 GMT this morning – only slightly softer than it’s close in NYC last night. Despite reaching a 4-week high this week traders are doubtful that the Rand will make any more significant gains today as the much anticipated FOMC meeting is scheduled for next week, and this has investors nervous about the start of QE tapering.
Local news
SA mining and production data was released this week and both showed improvements of 5% y/y and 0.6% y/y respectively. This failed to impact significantly on the ZAR however, as investors are not confident this will be sustained, especially with the recent gold mining strike and other various on-going strikes affecting the economy further down the line.
International news
US data over jobless claims was not accurate as two states failed to submit their figures on time. But today’s data on US retail sales will be closely watched ahead of next week’s FOMC meeting. The ZAR has enjoyed a relatively good week, but concerns over the withdrawal of investment from EMs if the FED starts QE tapering has traders expecting a volatile Rand in the days ahead.
TODAYS KEY DATA POINTS (GMT):
• 09:30 SA ILB Auction (800mn)
• 12:30 US PPI y/y
• 12:30 US Advice retail sales m/m
• 13:55 US Michigan consumer confidence (preliminary)
• 14:00 US Business inventories
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Thursday 12 September 2013
Rand holds onto recent gains
Trade report 12/09/2013
ZAR outlook
USD/ZAR expected range: 9.8100 – 9.9800
Despite the poor SA Import data released this week and the on-going strike action the ZAR ended the day yesterday as the best performing EM currency and closed at 9.8750 against the USD. The general feeling is that international sentiment and not local news is driving the EM currencies at the moment.
Local news
Locally, strikes in various sectors continue and vehicle production looks set to come to a halt by the end of this week, but manufacturing data for July that was released yesterday was surprisingly positive. This has helped the Rand maintain its firmer levels reached earlier in the week. SA mining production data is due to be released today which could pressurise the ZAR if it disappoints investors.
International news
EM currencies have generally performed better this week. US jobless claims and US retail sales data are due out tomorrow. These are key data points and may provide investors a hint of what decision will be taken at the FOMC meeting next week regarding QE tapering. The ZAR may as a result be subject to more volatility ahead of the week-end.
TODAYS KEY DATA POINTS (GMT):
• 09:30 SA Mining production y/y
• 12:30 US Initial jobless claims
• 12:30 US Import price index y/y
• 18:00 US Monthly budget statement
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ZAR outlook
USD/ZAR expected range: 9.8100 – 9.9800
Despite the poor SA Import data released this week and the on-going strike action the ZAR ended the day yesterday as the best performing EM currency and closed at 9.8750 against the USD. The general feeling is that international sentiment and not local news is driving the EM currencies at the moment.
Local news
Locally, strikes in various sectors continue and vehicle production looks set to come to a halt by the end of this week, but manufacturing data for July that was released yesterday was surprisingly positive. This has helped the Rand maintain its firmer levels reached earlier in the week. SA mining production data is due to be released today which could pressurise the ZAR if it disappoints investors.
International news
EM currencies have generally performed better this week. US jobless claims and US retail sales data are due out tomorrow. These are key data points and may provide investors a hint of what decision will be taken at the FOMC meeting next week regarding QE tapering. The ZAR may as a result be subject to more volatility ahead of the week-end.
TODAYS KEY DATA POINTS (GMT):
• 09:30 SA Mining production y/y
• 12:30 US Initial jobless claims
• 12:30 US Import price index y/y
• 18:00 US Monthly budget statement
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Wednesday 11 September 2013
Widening trade account hampers Rand
Trade report 11/09/2013
ZAR outlook
USD/ZAR expected range: 9.9200 – 10.1000
The Rand remained volatile yesterday as SA import data released was worse than expected, causing the Rand to soften to 10.0345 against the USD by 06.18 GMT on Wednesday. The poor data and ongoing local issues meant that the ZAR was one of only 3 EM currencies to weaken against the dollar.
Local news
The widening trade account in Africa’s biggest economy was the talk of the day yesterday as the data showed that SA continues to import more than it exports. Local strikes also continue with NAAMSA stating that the auto industry is set to lose about R20bn in production in the latest strike. Manufacturing data is due out today at 11:00GMT and will likely add further pressure to the ZAR if it disappoints market expectations.
International news
The next FOMC meeting is to be held next week which may have investors staying away from EM assets until there is confirmation one way or the other on QE tapering. But the news that President Obama has requested a delay on the vote on the Syrian airstrike will at least keep geopolitical tensions at bay for the meantime, which should help buffer the EM currencies.
TODAYS KEY DATA POINTS (GMT):
• 11:00 SA Manufacturing production n.s.a y/y
• 08:30 GB ILO unemployment rate
• 11:00 US MBA mortgage applications
• 14:00 US Wholesale inventories
• 14:00 US Wholesale sales
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ZAR outlook
USD/ZAR expected range: 9.9200 – 10.1000
The Rand remained volatile yesterday as SA import data released was worse than expected, causing the Rand to soften to 10.0345 against the USD by 06.18 GMT on Wednesday. The poor data and ongoing local issues meant that the ZAR was one of only 3 EM currencies to weaken against the dollar.
Local news
The widening trade account in Africa’s biggest economy was the talk of the day yesterday as the data showed that SA continues to import more than it exports. Local strikes also continue with NAAMSA stating that the auto industry is set to lose about R20bn in production in the latest strike. Manufacturing data is due out today at 11:00GMT and will likely add further pressure to the ZAR if it disappoints market expectations.
International news
The next FOMC meeting is to be held next week which may have investors staying away from EM assets until there is confirmation one way or the other on QE tapering. But the news that President Obama has requested a delay on the vote on the Syrian airstrike will at least keep geopolitical tensions at bay for the meantime, which should help buffer the EM currencies.
TODAYS KEY DATA POINTS (GMT):
• 11:00 SA Manufacturing production n.s.a y/y
• 08:30 GB ILO unemployment rate
• 11:00 US MBA mortgage applications
• 14:00 US Wholesale inventories
• 14:00 US Wholesale sales
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Tuesday 10 September 2013
Rand softens over possible GDP news
Trade report 10/09/2013
ZAR outlook
USD/ZAR expected range: 9.8900 – 10.0500
The ZAR was trading close to its strongest level in a month yesterday at around 9.9500 after US data came out softer than expected on Friday and the news of a possible halt of US air strike action against Syria. This has had positive effects on not just the Rand but the majority of emerging markets.
Local news
Important data due out today over South Africa's current account gap has caused the Rand to soften slightly today. Economists expect the gap to widen to 5.95% of GDP from 5.8% in the first quarter, and this has kept investors weary of the ZAR despite the positive international news. In addition persistent local strike action feeds the Rands general negative sentiment.
International news
President Obama’s statement that the US may hold off on military action, should the Russian proposal of Syria handing over its chemical weapon stocks be followed through, has helped 21 out of 24 EM currency’s show definite gains. This has been aided by improved confidence in the Chinese economy and recent doubts cast over when QE tapering will begin.
TODAYS KEY DATA POINTS (GMT):
• 08:00 SA Current account balance as a % of GDP
• 09:30 SA Bond auction
• 05:30 CN Industrial production y/y
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ZAR outlook
USD/ZAR expected range: 9.8900 – 10.0500
The ZAR was trading close to its strongest level in a month yesterday at around 9.9500 after US data came out softer than expected on Friday and the news of a possible halt of US air strike action against Syria. This has had positive effects on not just the Rand but the majority of emerging markets.
Local news
Important data due out today over South Africa's current account gap has caused the Rand to soften slightly today. Economists expect the gap to widen to 5.95% of GDP from 5.8% in the first quarter, and this has kept investors weary of the ZAR despite the positive international news. In addition persistent local strike action feeds the Rands general negative sentiment.
International news
President Obama’s statement that the US may hold off on military action, should the Russian proposal of Syria handing over its chemical weapon stocks be followed through, has helped 21 out of 24 EM currency’s show definite gains. This has been aided by improved confidence in the Chinese economy and recent doubts cast over when QE tapering will begin.
TODAYS KEY DATA POINTS (GMT):
• 08:00 SA Current account balance as a % of GDP
• 09:30 SA Bond auction
• 05:30 CN Industrial production y/y
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
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Monday 9 September 2013
Local events threaten ZAR gains
Trade report 09/09/2013
ZAR outlook
USD/ZAR expected range: 9.9600 – 10.1100
The ZAR finished off the week well as it surged to a 3 week high against the USD. This was mostly due to US data that came in softer than expected and the welcome news that the gold strike was over after unions and gold producers came to an agreement over wages. The ZAR was trading slightly softer this morning dropping to 10.0305 but still stronger than the lows of the last few weeks.
Local news
Locally, domestic events threaten to undermine the gains made by the ZAR in the last few days. The ever-present threat of strikes is likely to keep investors wary as petrol station workers and car dealership workers plan to strike from Monday. Economists are nervous of a widening of the current account when the SARB releases its second quarter bulletin on Tuesday, which will also put pressure on the Rand.
International news
News that the US job numbers came in below expectations helped the ZARs recovery on Friday. This casts doubt over when the FED will likely introduce QE tapering which helped boost the EM currencies. Important US retail sales data due out later in the week should give a better indication on when the much talked about QE tapering will actually begin.
TODAYS KEY DATA POINTS (GMT):
• 15:00 US Fed’s Williams speaks at NABE
• 19:00 US Consumer credit (USD)
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ZAR outlook
USD/ZAR expected range: 9.9600 – 10.1100
The ZAR finished off the week well as it surged to a 3 week high against the USD. This was mostly due to US data that came in softer than expected and the welcome news that the gold strike was over after unions and gold producers came to an agreement over wages. The ZAR was trading slightly softer this morning dropping to 10.0305 but still stronger than the lows of the last few weeks.
Local news
Locally, domestic events threaten to undermine the gains made by the ZAR in the last few days. The ever-present threat of strikes is likely to keep investors wary as petrol station workers and car dealership workers plan to strike from Monday. Economists are nervous of a widening of the current account when the SARB releases its second quarter bulletin on Tuesday, which will also put pressure on the Rand.
International news
News that the US job numbers came in below expectations helped the ZARs recovery on Friday. This casts doubt over when the FED will likely introduce QE tapering which helped boost the EM currencies. Important US retail sales data due out later in the week should give a better indication on when the much talked about QE tapering will actually begin.
TODAYS KEY DATA POINTS (GMT):
• 15:00 US Fed’s Williams speaks at NABE
• 19:00 US Consumer credit (USD)
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Friday 6 September 2013
Rand holds firm amid talks gold strike may be over
Trade report 06/09/2013
ZAR outlook
USD/ZAR expected range: 10.1800 – 10.3500
News that the strike in the gold sector may be close to a resolution has helped the ZAR hold onto its gains against the dollar. The Rand was around 10.22 to the USD in early morning trading after closing at 10.23 last night in New York. The Rand remains under pressure though as US data due out is likely to point toward QE tapering in the near future.
Local news
The ZAR remains one of the more vulnerable EM currencies as the strikes in the auto sector, clothing sector and gold sector continue to deter investors. The NUM is optimistic that the wage increase negotiation will be concluded today and this news has helped keep the ZAR firmer than originally expected overnight. There are reports that some workers have even returned to work but no official statement has been released.
International news
With important US data regarding nonfarm payrolls and unemployment due out at 12.30 GMT today, investors will be watching the markets closely. The Rand is under pressure due to talks of the FED tapering QE at its next meeting, and it is expected that the US data released today will support this theory. This will affect all EM currencies as investors return to safe havens like the USD.
TODAYS KEY DATA POINTS (GMT):
• 06:00 SA Net reserves (USD)
• 09:30 SA ILB Auction
• 08:30 GB Industrial production y/y
• 08:30 GB Manufacturing production y/y
• 08:30 GB Visible trade balance (GBP)
• 12:00 US FED’s Evans speaks
• 12:30 US Nonfarm payrolls
• 12:30 US Unemployment rate
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ZAR outlook
USD/ZAR expected range: 10.1800 – 10.3500
News that the strike in the gold sector may be close to a resolution has helped the ZAR hold onto its gains against the dollar. The Rand was around 10.22 to the USD in early morning trading after closing at 10.23 last night in New York. The Rand remains under pressure though as US data due out is likely to point toward QE tapering in the near future.
Local news
The ZAR remains one of the more vulnerable EM currencies as the strikes in the auto sector, clothing sector and gold sector continue to deter investors. The NUM is optimistic that the wage increase negotiation will be concluded today and this news has helped keep the ZAR firmer than originally expected overnight. There are reports that some workers have even returned to work but no official statement has been released.
International news
With important US data regarding nonfarm payrolls and unemployment due out at 12.30 GMT today, investors will be watching the markets closely. The Rand is under pressure due to talks of the FED tapering QE at its next meeting, and it is expected that the US data released today will support this theory. This will affect all EM currencies as investors return to safe havens like the USD.
TODAYS KEY DATA POINTS (GMT):
• 06:00 SA Net reserves (USD)
• 09:30 SA ILB Auction
• 08:30 GB Industrial production y/y
• 08:30 GB Manufacturing production y/y
• 08:30 GB Visible trade balance (GBP)
• 12:00 US FED’s Evans speaks
• 12:30 US Nonfarm payrolls
• 12:30 US Unemployment rate
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Thursday 5 September 2013
Rand steady ahead of busy week-end
Trade report 05/09/2013
ZAR outlook
USD/ZAR expected range: 10.2000 – 10.3600
The Rand has held steady against the USD overnight and was trading around 10.26 to the dollar this morning. With some important data due out today this will likely influence the ZAR as it may strengthen expectations that the US Central Bank will soon pull back from purchases that have injected money into emerging markets.
Local news
In local news the Rand rallied around news that 2 of the 7 gold producers affected by strike action, have come to an agreement over wage negotiations. As EMs attempt to protect their currencies, Finance Minister Gordhan has hinted at implementing efforts to reduce strike action as well as gradual reserve building to help address the underlying causes of the ZARs vulnerability.
International news
At the Emerging economies meeting in Russia this week countries will be discussing the FEDs expected tapering of QE and the risks to the global market. With plenty of important data out today and tomorrow it is potentially a very volatile time for the Rand, with investors also keeping an eye on the lingering Syrian crisis.
TODAYS KEY DATA POINTS:
• 11:00 GB BoE rate announcement
• 12:15 US ADP employment change
• 12:30 US Initial jobless claims
• 14:00 US ISM non-manufacturing composite
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ZAR outlook
USD/ZAR expected range: 10.2000 – 10.3600
The Rand has held steady against the USD overnight and was trading around 10.26 to the dollar this morning. With some important data due out today this will likely influence the ZAR as it may strengthen expectations that the US Central Bank will soon pull back from purchases that have injected money into emerging markets.
Local news
In local news the Rand rallied around news that 2 of the 7 gold producers affected by strike action, have come to an agreement over wage negotiations. As EMs attempt to protect their currencies, Finance Minister Gordhan has hinted at implementing efforts to reduce strike action as well as gradual reserve building to help address the underlying causes of the ZARs vulnerability.
International news
At the Emerging economies meeting in Russia this week countries will be discussing the FEDs expected tapering of QE and the risks to the global market. With plenty of important data out today and tomorrow it is potentially a very volatile time for the Rand, with investors also keeping an eye on the lingering Syrian crisis.
TODAYS KEY DATA POINTS:
• 11:00 GB BoE rate announcement
• 12:15 US ADP employment change
• 12:30 US Initial jobless claims
• 14:00 US ISM non-manufacturing composite
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Wednesday 4 September 2013
Rand firms as NUM lowers wage demands
Trade report 04/09/2013
ZAR outlook
USD/ZAR expected range: 10.2000 – 10.4100
The markets picked up yesterday after the quieter start to the week and the ZAR lost ground in the closing session yesterday afternoon closing at 10.3250 to the dollar, but this morning managed to firm up slightly as the National Union of Minewokers (NUM) offered to lower its wage increase demands earlier today. But the ZAR is likely to remain on the back foot as it struggles against negative investor sentiment due to other on-going strikes and mounting talk about military action in Syria.
Local news
The gold miners strike which started yesterday is set to cost the local economy $35 each day it continues. Since NUM have offered to lower the wage increase demand it is hoped this will shorten the duration of the strike, which will help the struggling ZAR, as strikes in the auto sector and clothing and manufacturing sector continue.
International news
Recent US data released this week shows an improvement in the US economy. This raises expectations that the FED will taper QE, and with the next FOMC meeting set for the middle of the month, this places pressure on the already vulnerable Rand and other emerging markets.
TODAYS KEY DATA POINTS:
• 08:30 GB PMI services
• 11:00 US MBA mortgage applications
• 12:30 US Trade Balance (USD)
• 13:45 US ISM New York
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ZAR outlook
USD/ZAR expected range: 10.2000 – 10.4100
The markets picked up yesterday after the quieter start to the week and the ZAR lost ground in the closing session yesterday afternoon closing at 10.3250 to the dollar, but this morning managed to firm up slightly as the National Union of Minewokers (NUM) offered to lower its wage increase demands earlier today. But the ZAR is likely to remain on the back foot as it struggles against negative investor sentiment due to other on-going strikes and mounting talk about military action in Syria.
Local news
The gold miners strike which started yesterday is set to cost the local economy $35 each day it continues. Since NUM have offered to lower the wage increase demand it is hoped this will shorten the duration of the strike, which will help the struggling ZAR, as strikes in the auto sector and clothing and manufacturing sector continue.
International news
Recent US data released this week shows an improvement in the US economy. This raises expectations that the FED will taper QE, and with the next FOMC meeting set for the middle of the month, this places pressure on the already vulnerable Rand and other emerging markets.
TODAYS KEY DATA POINTS:
• 08:30 GB PMI services
• 11:00 US MBA mortgage applications
• 12:30 US Trade Balance (USD)
• 13:45 US ISM New York
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Tuesday 3 September 2013
Rand remains steady after quiet start to the week
Trade report 03/09/2013
ZAR outlook
USD/ZAR expected range: 10.1900 – 10.3500
The ZAR held steady against the USD overnight and opened at 10.265 this morning. Despite the quiet start to the week as the US celebrated Labour Day yesterday, the ZAR remains vulnerable, mainly due to US data set to be released this week, and on-going strikes locally. This may accelerate foreign outflows as investors turn to safe-havens such as the USD.
Local news
The latest on the local strike news is that workers at petrol stations and car dealerships have postponed their strike for a week. More positive news is that clothing and textile workers have reached a wage agreement with their bosses, so have returned to work. However, the National Union of Mineworkers is set to go on strike from today – this will cost the economy more than $35 per day in lost output.
International news
The ZAR has managed to hold relatively steady following the decreased threat of military action in Syria and the positive Chinese data released. But as we approach the next FOMC meeting which should shed more light on QE tapering expectations, investors will be weary of key US Data being released this week (trade numbers, jobless claims, services PMI) which may keep the Rand subdued.
TODAYS KEY DATA POINTS:
• 09:30 SA Bond auction (R2048 – 900mn, R2037 – 550mn, R214 – 900mn)
• 09:30 SA SACCI business confidence
• 10:00 SA BER business confidence
• 08:30 GB PMI construction
• 12:58 US Markit PMI Manufacturing (final)
• 14:00 US ISM manufacturing PMI
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ZAR outlook
USD/ZAR expected range: 10.1900 – 10.3500
The ZAR held steady against the USD overnight and opened at 10.265 this morning. Despite the quiet start to the week as the US celebrated Labour Day yesterday, the ZAR remains vulnerable, mainly due to US data set to be released this week, and on-going strikes locally. This may accelerate foreign outflows as investors turn to safe-havens such as the USD.
Local news
The latest on the local strike news is that workers at petrol stations and car dealerships have postponed their strike for a week. More positive news is that clothing and textile workers have reached a wage agreement with their bosses, so have returned to work. However, the National Union of Mineworkers is set to go on strike from today – this will cost the economy more than $35 per day in lost output.
International news
The ZAR has managed to hold relatively steady following the decreased threat of military action in Syria and the positive Chinese data released. But as we approach the next FOMC meeting which should shed more light on QE tapering expectations, investors will be weary of key US Data being released this week (trade numbers, jobless claims, services PMI) which may keep the Rand subdued.
TODAYS KEY DATA POINTS:
• 09:30 SA Bond auction (R2048 – 900mn, R2037 – 550mn, R214 – 900mn)
• 09:30 SA SACCI business confidence
• 10:00 SA BER business confidence
• 08:30 GB PMI construction
• 12:58 US Markit PMI Manufacturing (final)
• 14:00 US ISM manufacturing PMI
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
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Monday 2 September 2013
Cautious trading as Rand rallys
Trade report 02/09/2013
ZAR outlook
USD/ZAR expected range: 10.1600 – 10.3000
After reaching a 4 year low last week the Rand has managed to rally against the USD and opened this morning at 10.19 to the dollar. A cautious week on the markets is expected as we wait to hear the latest developments on the Syrian saga as well as interest rate decisions by the BOE and the European Central Bank.
Local news
Locally as strikes continue in various sectors; a new strike is set to begin in the gold industry from Tuesday as miners demand higher wages; and investors have largely sold off EM assets due to Syrian uncertainty, the ZAR has found itself in an increasingly fragile position. The latest talk is that the SARB will need to step in and increase interest rates in an effort to protect the currency. This was highlighted by the rallying of the ZAR on Friday afternoon after Finance Mimister Pravin Gordhan mentioned that the government may intervene to support the currency.
International news
The delay in military action against Syria and positive Chinese data released on Friday were both factors in the steadying of the Rand on Friday. Today is likely to be a quieter day on the markets with it being a public holiday in the US for Labour Day which should help the ZAR remain steady for the start of the week.
TODAYS KEY DATA POINTS:
• 09:00 SA Naamsa vehicle sales y/y
• 09:00 SA Kagiso PMI
• 08:30 GB PMI Manufacturing
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
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ZAR outlook
USD/ZAR expected range: 10.1600 – 10.3000
After reaching a 4 year low last week the Rand has managed to rally against the USD and opened this morning at 10.19 to the dollar. A cautious week on the markets is expected as we wait to hear the latest developments on the Syrian saga as well as interest rate decisions by the BOE and the European Central Bank.
Local news
Locally as strikes continue in various sectors; a new strike is set to begin in the gold industry from Tuesday as miners demand higher wages; and investors have largely sold off EM assets due to Syrian uncertainty, the ZAR has found itself in an increasingly fragile position. The latest talk is that the SARB will need to step in and increase interest rates in an effort to protect the currency. This was highlighted by the rallying of the ZAR on Friday afternoon after Finance Mimister Pravin Gordhan mentioned that the government may intervene to support the currency.
International news
The delay in military action against Syria and positive Chinese data released on Friday were both factors in the steadying of the Rand on Friday. Today is likely to be a quieter day on the markets with it being a public holiday in the US for Labour Day which should help the ZAR remain steady for the start of the week.
TODAYS KEY DATA POINTS:
• 09:00 SA Naamsa vehicle sales y/y
• 09:00 SA Kagiso PMI
• 08:30 GB PMI Manufacturing
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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