Trade report 17/10/2013
ZAR outlook
USD/ZAR expected range: 9.7800 – 9.9300
The news that the US Congress has reached a deal to extend the debt ceiling and reopen the government has been welcomed by the markets as US stocks have rallied overnight and EM sentiment has remained buoyant. The Rand was only slightly softer at R9.8650/$ this morning and 0.18% up against the Euro to R13.3169/EUR.
Local news
The Rand hit near 3-week highs yesterday and held firm this morning after the news that the US has made a deal in the eleventh hour to reopen the government and avoid an economic default. Investors however, are not confident that this will be sustained into the medium-term as the ZAR remains vulnerable due to it’s wide c/a balance and the ever present threat of strike action.
International news
Now that the US crisis is over focus is likely to shift back to talk on the likelihood of the Fed holding off on QE tapering especially with the uncertainty on the government budget as the current agreement is only a temporary one. This will be good news from the ZAR and all EM currencies.
TODAYS KEY DATA POINTS (GMT):
• SA Switch auction cancelled
• 08:30 GB Retail sales excluding auto fuel y/y
• 11:45 US Fed’s Fisher speaks
• 12:30 US Initial jobless claims
• 14:00 US Philadelphia Fed index
• 16:45 US Fed’s Evans speaks on the economy
• 16:45 US Fed’s George speaks on the economy
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