Wednesday, 9 October 2013

Market tense as Rand stays firm

Trade report 09/10/2013

ZAR outlook

USD/ZAR expected range: 9.91 – 10.0600

The ZAR has managed to firm up in the last couple of days and was trading at R9.96/$ at 09:05 this morning, not far off its close in New York yesterday.  The markets remain very subdued however as investors wait to hear updates on the US government shut down and the approaching debt ceiling.

Local news

Despite SA’s current obstacles such as the on-going strike issue and widening c/a deficit, local news is being mostly overshadowed by the US government shutdown which is still dragging on.  Traders expect the ZAR to continue trading in a narrow range until an agreement in the US budget deadlock is reached and the government reopens.

International news

The deadline for lawmakers to raise the US borrowing limit is looming and as the date approaches it will have an increasing effect on the markets which means SA and other Ems are increasingly vulnerable.  Traders are also waiting for confirmation of Janet Yellen as the next head of the Federal Reserve.  She is seen as a dovish figurehead and this raises speculation that QE tapering may be held off for a while longer.

TODAYS KEY DATA POINTS (GMT):

• 08:30 GB Industrial production y/y
• 08:30 GB Visible trade balance (GBP)
• 11:00 US MBA mortgage applications
• 14:00 US Wholesale inventories (postponed)
• 14:00 US Wholesale sales (postponed)
• 18:00 US Fed Releases Minutes from September 17-18 FOMC Meeting


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