Thursday, 14 November 2013

Fed comments help ZAR firm up

Trade report 14/11/2013

ZAR outlook

USD/ZAR expected range: 10.2100 – 10.3500


Janet Yellen’s comments yesterday that the economy and labour market are “performing far short of their potential” and must improve before the Fed can start QE tapering have helped the Rand show some much needed gains after a poor start to the week.  The ZAR was trading at R10.3025/$ at 08:55GMT with scope for some modest gains today.

Local news

Progress in wage negotiations have helped the ZAR claw back slightly.  News that the unions and mining companies are a step closer to reaching a compromise over wages has helped investor sentiment and in turn helped the struggling Rand recover during what has been a tough week for emerging markets.

International news


The ZAR has been allowed a slight recovery due to the doveishness of the Feds Janet Yellen’s comments, but gains have been only moderate as the broader market does not yet feel convinced about the timing of QE tapering.  Should investors see more evidence of this, we would expect to see a much firmer recovery by the ZAR.

TODAYS KEY DATA POINTS (GMT):


•    09:30    SA    Switch auction (Source:R201 – Destination:R186 – R500mn)
•    07:00    DE    GDP y/y nsa (preliminary)
•    09:00    EZ    ECB publishes Monthly report
•    09:30    GB    Retail sales excluding auto fuel y/y
•    10:00    EZ    GDP sa y/y (advance)
•    13:30    US    Initial jobless claims
•    13:30    US    Trade balance (USD)
•    15:00    US    Senate confirmation hearing for Fed’s Yellen

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