Trade report 05/11/2013
ZAR outlook
USD/ZAR expected range: 10.0700 – 10.2100
The ZAR managed to firm up slightly yesterday after a quiet start to the week as European data released yesterday did not have any real impact in the markets. The Rand was at R10.1465/$ at 08:20 GMT, slightly down from its overnight close, but firmer that it’s R10.2145 low of yesterday.
Local news
It is important to note that despite trading slightly firmer in the past day or so, that the ZAR remains the third worst performing EM currency on the week. Added to South Africa’s twin deficits the renewed bout of strike action is adding to the ZARs woes, as it is knocking investor confidence in the currency. Another concern to investors is the lapse of SA’s investment treaties with some of its EU trading parties as the replacement law does not offer the same protection.
International news
Recent manufacturing data out of some of the major economies tends towards confirming a gradual improvement in the growth trajectory. While this is positive news, it also leaves investors nervous that the Fed may look to start its QE tapering earlier than March next year.
TODAYS KEY DATA POINTS (GMT):
• 09:30 SA Bond auction
• 08:00 EZ ECB’s Constancio speaks
• 09:30 GB PMI services
• 10:00 EZ PPI y/y
• 13:30 EZ ECB President Draghi speaks
• 14:00 EZ ECB’s Asmussen speaks in Berlin
• 15:00 US ISM non-manufacturing composite
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