Wednesday, 30 October 2013

Rand steady as investors await FOMC result

Trade report 30/10/2013

ZAR outlook

USD/ZAR expected range: 9.8100 – 9.9700

After trading slightly weaker against the USD yesterday, the ZAR has steadied this morning and is back to trading at mid-October levels.  The Rand was trading at R9.8825/$ at 08:37 this morning and investors expect it to remain trading in a narrow range ahead of the FOMC announcement later on today.

Local news

In local news the SARB released its Financial Stability Review yesterday and has warned of a risk to the ratings outlook as a result of the on-going strike action and a slowing economy.  Investors are also weary of the negative sentiment caused by local labour issues in the mining sector, where the Association of Mineworkers and Construction Union is threatening a call a strike at Impala Platinum.


International news

In a key US announcement today the FOMC will release its rate decision.  “The market expects the Fed to start QE tapering only in March next year, but if the Fed policy statement proves to be more hawkish, we expect the Rand together with other risky assets to weaken and vice versa”, Absa Capital analysts said in a note this morning.

TODAYS KEY DATA POINTS (GMT):

• 12:00 SA South African budget (ZAR)
• 11:00 US MBA mortgage applications
• 12:15 US ADP employment change
• 12:30 US CPI y/y
• 18:00 US FOMC rate decision


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