Wednesday, 11 December 2013

ZAR boosted by positive local data

Trade report 11/12/2013

ZAR outlook

USD/ZAR expected range: 10.2600 – 10.4100

Upbeat mining and manufacturing data released yesterday helped the ZAR strengthen to its strongest position in almost a week at R10.2725/$.  This morning at 06:25GMT the Rand was at R10.3600/$ and trading in a narrow range with little scope for any major changes, although local data due for release today may help it firm should it come out stronger than expected.

Local news

Mining data and manufacturing data came out stronger than expected yesterday helping the Rand firm up slightly.  Mining production increased by a significant 22% year on year in October while manufacturing data surprised the market by rising 1.5% from a 3.3% contraction previously.  Q3 employment data also came in with a 0.2% y/y increase which made it a good day all round for local data releases.

International news

The Rand was the best performer yesterday of the emerging markets with its positive data releases helping boost the currency slightly.  In other news US lawmakers have reached a budget deal overnight which lifts spending over the next two years by $63bn.  This increase should avoid another government shut-down in January which increases the speculation of a start to Fed tapering at next week’s policy meeting.

TODAYS KEY DATA POINTS (GMT):

• 08:00 SA CPI y/y
• 11:00 SA Retail sales constant y/y
• 07:00 DE CPI y/y (final)
• 12:00 US MBA mortgage applications
• 19:00 US Monthly budget statement


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