Wednesday 6 November 2013

Fed comments help a softening Rand

Trade report 06/11/2013

ZAR outlook


USD/ZAR expected range: 10.1600 – 10.3300

The Rand dropped significantly against the USD yesterday and closed the day at R10.2460/$.  Dovish remarks by two Federal Reserve officials mentioning subdued growth in the US economy, have since helped prop the ZAR up, and this morning at 06:45 GMT the Rand had recovered by 0.4% to R10.2025/$.

Local news

On-going strike action and fears that the mining strike will spread across the platinum industry are knocking investor sentiment in the ZAR.  SACCI Business Confidence data for October is also due for release today and it will be interesting to note if it has moved up from September.  Last month’s figures had moved up, but were still low compared to last year.

International news

Recent dovish remarks by the Federal Reserve’s Williams and Lacker have added to speculation that the Fed will hold off on QE tapering until at least March of next year.  Although, traders will be watching for this week’s US employment data as if it comes in stronger than expected it could put renewed pressure on the Rand.

TODAYS KEY DATA POINTS (GMT):

• 09:30 SA SACCI Business Confidence
• 08:55 DE PMI services (final)
• 09:00 EZ PMI services (final)
• 10:00 EZ Retail sales y/y
• 11:00 DE Factory orders y/y
• 12:00 US MBA mortgage applications
• 15:00 US Leading indicators


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