Trade report 19/11/2013
ZAR outlook
USD/ZAR expected range: 10.1100 – 10.2500
The Rand has continued it’s recovery against the USD after last week’s slide and at 06:37GMT this morning was trading at R10.1450/$, the level it closed at on Monday evening. With the markets having turned towards riskier emerging markets this is particularly evident as 4 out of the top 5 performers over the past week have been the BRL, INR, ZAR and TRY, all characterized as part of the “Fragile 5.”
Local news
The ZAR is enjoying a period of recovery after reaching a low of R10.4600/$ a week ago. Despite this the Rand remains vulnerable due to its large twin deficits and with the SARB likely to leave interest rates low for the meantime, the ZAR will continue to struggle when market sentiment turns away from risky assets.
International news
EM currencies are enjoying a period of less pressure as news of economic reform from China helps boost riskier markets and general market feeling is that of a doveish Fed. Today is likely to be a quieter day as investors await the next round of Fed speakers as well as US data releases and SA’s CPI data release on Wednesday.
TODAYS KEY DATA POINTS (GMT):
• 09:30 SA Bond auction (R2048 – R950mn; R2030 – R450mn; R214 – R950mn)
• 10:00 SA BER business confidence
• 08:30 EZ ECB’s Praet, EBA’s Enria speak
• 10:00 EZ Construction output wda y/y
• 10:00 EZ ZEW economic sentiment
• 10:00 EZ ZEW economic sentiment
• 19:15 US Fed’s Evans speaks to bankers in Chicago
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