Trade report 18/12/2013
ZAR outlook
USD/ZAR expected range: 10.2800 – 10.4500
As the conclusion of the FOMC meeting draws nearer there has been some nervous trading in the markets causing the Rand and the majority of the EM currencies to slip against the USD. The Rand was down 0.26% this morning from its overnight close against the USD and at 06:57GMT was trading at R10.3570/USD.
Local news
The Rand is trading softer against the USD, with little local data to help prop it up while the markets are being dominated by Fed taper talk. That said however, the weakening momentum should the Fed decide to start tapering, should not be overly pronounced into the first half of next year as this has been the talk in the markets since May already.
International news
Investors will be keenly awaiting the results of the FOMC meeting due to be released later this evening in the US. There are two likely scenarios and the market participants remain heavily divided between the two. The first is that the Fed starts a modest degree of tapering from today and the second is the delaying of tapering but with strong indications as to when they will start the taper, most likely either Jan or March 2014.
TODAYS KEY DATA POINTS (GMT):
• 07:00 SA Leading indicator
• 09:00 DE IFO business climate
• 09:30 GB BoE releases MPC minutes
• 09:30 GB ILO unemployment rate
• 10:00 EZ Construction output wda y/y
• 13:30 US Housing starts
• 19:00 US FOMC rate decision
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