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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