Trade report 20/11/2013
ZAR outlook
USD/ZAR expected range: 10.1300 – 10.2700
News of Eskoms power emergency has brought the ZAR’s steady recovery to an end, as the local currency dropped to R10.2000/$ after the news broke. This morning the Rand was down to R10.2120 in early trade. The USD is also under pressure as the Fed chief Bernanke comments yesterday fell in line with those of soon-to-be chairwoman Yellen.
Local news
Eskom, which provides 95% of South Africa’s electricity declared a power emergency late yesterday and urged industrial customers to reduce power use. It also warned that there is a chance that rolling black-outs may have to be re-introduced. This news not only dampens investor sentiment but also poses a threat to SA’s overall GDP.
International news
While the ZAR struggles with news of the Eskom power emergency, other EMs continue to recover against a steadily softening USD due to mounting expectation of a doveish stance towards QE tapering. There is much US data still to be released this week as well as Fed minutes which investors will be keenly awaiting as they try to gauge the timing of the taper.
TODAYS KEY DATA POINTS (GMT):
• 08:00 SA CPI y/y
• 09:30 GB BoE releases MPC minutes
• 13:30 US Retail sales excluding auto and gas m/m
• 13:30 US CPI y/y
• 15:00 US Fed’s Dudley to speak on economy
• 15:00 US Existing home sales
• 15:00 US Business inventories m/m
• 17:10 US Fed’s Bullard speaks
• 19:00 US Fed releases minutes from October 29-30 FOMC
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