Trade report 22/11/2013
ZAR outlook
USD/ZAR expected range: 10.0800 – 10.2100
After a volatile week for the ZAR, it is managing to hold steady against the USD today with news that, despite no change in interest rates yesterday, a rate hike had been discussed by the SARB. An increase in the interest rate would be seen as an attempt to reduce South Africa’s critical current account and budget deficits. The currency was trading at R10.1400/$ at 06:49GMT only slightly off the R10.1265/$ close in New York yesterday.
Local news
The SARB decided to leave interest rates unchanged at 5% yesterday as the economy is battling from weak economic growth and heightened inflation risks. However Governor Gill Marcus did mention that there had been a discussion of increasing the repo rate. This would help the strength of the ZAR especially with the uncertainty of QE tapering looming.
International news
It is likely to be a quiet days trading today with no key data due for release. The main driver in the markets at the moment is the speculation of QE tapering and this is most likely to remain the case as key events and data releases start winding down as the last month of the year approaches.
TODAYS KEY DATA POINTS (GMT):
• 07:00 SA Gill Marcus’ speech published on SARB website
• 09:30 SA ILB auction (R800mn)
• 07:00 DE GDP y/y nsa (final)
• 08:00 EZ ECB’s Noyer, Praet, Nowotny speak
• 09:00 DE IFO business climate
• 13:40 US Fed’s George speaks on banking supervision
• 16:00 US Kansas City manufacturing activity
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