Trade report 14/01/2014
ZAR outlook
USD/ZAR expected range: 10.7300 – 10.8800
After the Rands temporary reprieve on Friday afternoon and Monday morning the ZAR is once again under pressure and close to another five year low. Investor appetite has been severely dampened mainly due to the weak outlook for the SA economy. By 06:52 GMT the ZAR was trading at R10.8350/USD, barely changed from its overnight close in New York on Monday evening.
Local news
The ZAR remains one of the poorest performing EM currencies as local issues keep investors at bay. The threat of renewed strike action in the mining industry and a warning from Eskom that the country may be facing electricity shortages in the months ahead are two of the issues dampening investor appetite and holding back the countries projected economic growth.
International news
The poor US non-farm payrolls data continued to hold back the USD at the start of the week and investors are now waiting for the release of the US retail sales growth data which economists have predicted will show a slow-down. This will add to speculation that the Fed may decide against faster tapering of it bond buying programme. The Pound weakened against most of its peers yesterday after data was released showing the UK index had dropped to its lowest level in three weeks, after last week’s negative data releases.
TODAYS KEY DATA POINTS (GMT):
• 09:30 SA Mining production y/y
• 09:30 SA Bond auction (R2030 – 1bn; R214 – 800mn; R186 – 550mn)
• 09:30 GB CPI y/y
• 10:00 EZ Industrial production (wda) y/y
• 13:30 US Advance retail sales index
• 13:30 US Import price index y/y
• 15:00 US Business inventories m/m
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