Trade report 08/10/2013
ZAR outlook
USD/ZAR expected range: 9.920 – 10.0700
The ZAR strengthened from overnight trading figures as the USD continues to struggle in a market consumed with the US partial government shutdown. The ZAR was trading at R9.9950/$ at 06:51GMT which is 0.1% up from its close in New York on Monday evening. Reuters data reveals that USD-ZAR volumes fell to multi-month lows yesterday mainly due to the continued US government deadlock and the approaching 17th October debt ceiling date.
Local news
The struggling USD has helped the ZAR stay firm over the last week despite on-going strike action and SA’s wide current account deficit. Pravin Gordhan has been quoted as saying there is a “heightened sense of anxiety” among the world’s investors and policy makers over the approaching US debt ceiling and warned that emerging economies need to make sure of their fiscal credibility and to take steps to address vulnerabilities such as high current account deficits.
International news
As the US government crisis continues the likelihood of further data releases being postponed increases, which leaves traders with little indication as to the consumer environment although analysts are now fairly confident the FED will hold back on QE tapering until the new year, which may offer short term relief to EMs.
TODAYS KEY DATA POINTS (GMT):
• 09:30 SA Bond auction
• 12:30 US Trade balance (USD) (Likely postponed)
• 16:25 US Fed’s Pianalto speaks on economy
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