Trade report 04/12/2013
ZAR outlook
USD/ZAR expected range: 10.2900 – 10.4400
Investor confidence in the ZAR was badly shaken yesterday as current account data revealed a deficit of over R230bn and failed to sustain growth from Q3 to Q4. The Rand was down at R10.3780/$ at 06:14 GMT, already 0.5% weaker than its close in New York yesterday. Added to this increased talk over the timing of the Fed taper has the ZAR on the backfoot.
Local news
“The current account is a real concern. At 6.8 percent of GDP in 3Q13, the deficit is the worst since the crisis”, an analyst wrote in a note. South Africa now has to deal with a c/a deficit of R230bn which is the largest on record. This increases the reliance on foreign-capital to plug the gap, but with traders speculating over the timing of the Fed taper the Rand is left very exposed and remains one of the worst EM performers.
International news
The Pound and the Euro have enjoyed recent gains after positive GB construction data and improved unemployment numbers out of Spain were released. Investors will be keenly awaiting the next set of data out of the US, including GDP, unemployment and trade balance data. This data should give a better idea of the state of the US economy in the run-up to the next FOMC meeting in two weeks’ time.
TODAYS KEY DATA POINTS (GMT):
• 07:15 SA HSBC/Markit Composite PMI
• 09:00 EZ PMI services (final)
• 10:00 EZ GDP sa q/q (second reading)
• 10:00 EZ Retail sales y/y
• 13:15 US ADP employment change
• 13:30 US Trade balance (USD)
• 15:00 US ISM non-manufacturing composite
• 15:00 US New home sales
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