Trade report 13/12/2013
ZAR outlook
USD/ZAR expected range: 10.3400 – 10.4800
The Rand softened further against the USD yesterday and is likely to encounter more losses as talk increases of an imminent start to QE tapering by the Fed. The ZAR was at R10.4150/$ in early morning trade, 0.24% softer than its close in New York yesterday evening.
Local news
The ZAR finds itself in a vulnerable position as talk of a start to the FED taper as early as next week at its last meeting for the year mounts. The Rand is one of the riskier EM currencies, heavily reliant on foreign funding to plug its current account deficit, and with domestic interest rates at four-decade lows the currency doesn’t hold the high yield appeal that attracts investors.
International news
The USD is enjoying a period of gains after retail sales data and consumer confidence data came in stronger than expected. Jobless claims increased however, although this data tends to be volatile and the improved retail sales data will definitely add to the increasing speculation of a start to Fed tapering from next week. The GBP meanwhile made gains on the EUR after the British Chamber of Commerce announced that it believes the UK economy will expand at its fastest pace in 7 years in 2014.
TODAYS KEY DATA POINTS (GMT):
• 09:30 SA ILB auction (R800mn)
• 09:45 EZ ECB Coeure speaks
• 10:00 EZ Employment y/y
• 11:45 EZ ECB’s Constancio, Hansson speak
• 12:30 GB BoE’s Dale speaks
• 13:30 US PPI y/y
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