Trade report 17/01/2014
ZAR outlook
USD/ZAR expected range: 10.8000 – 10.9500
The Rand enjoyed a temporary reprieve yesterday and moved away from the key level of R11.00/USD after poor US jobless numbers were released. The ZAR was trading at R10.8750/USD by 06:30GMT this morning, 0.2% stronger than its close in New York yesterday. Should the Rand manage to hold onto these levels it will show its first positive day this week.
Local news
The ZAR has had a volatile week and comes in as the second worst EM performer over the week as ranked by Bloomberg. The threat of strikes in the platinum mines continues to dampen investor appetite and the large current account and budget deficits remain key issues. Added to this the USD is enjoying a period of strong gains which helps keep the Rand on the backfoot.
International news
The poor US jobless data has helped give EM currencies a temporary reprieve but economists don’t think this will affect the taper decision at the FOMC next week as the stronger focus will remain on the better than anticipated US data from earlier in the week, which include retail sales and Empire manufacturing growth. The USD has strengthened this week no small part to the fact that the markets expect tapering to continue this year with a small taper at next week’s meeting a likelihood.
TODAYS KEY DATA POINTS (GMT):
• 09:30 SA ILB auction (R800mn)
• 09:30 GB Retail sales excluding auto fuel y/y
• 10:00 EZ Construction output wda y/y
• 13:30 US Housing starts
• 13:30 US Building permits
• 14:15 US Industrial production m/m
• 14:55 US Michigan consumer confidence (preliminary)
• 17:30 US Fed’s Lacker speaks on economic outlook
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