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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