Trade report 09/01/2014
ZAR outlook
USD/ZAR expected range: 10.6900 – 10.8400
US jobs data came in stronger than expected yesterday boosting the USD against most of the major currencies and forcing the ZAR to a fresh 5-year low. The ZAR recovered modestly this morning but this may be short-lived should manufacturing data disappoint. It hit a low yesterday of R10.7925 but this morning had recovered by 0.4% by 06:51GMT to R10.7400/USD.
Local news
Comments by SARB Governor Marcus yesterday mentioned that global growth for the year ahead has improved, a factor which has previously helped back the SARBs decisions to keep interest rates low. However this does not improve the widening current account and budget deficits, one of the main reasons for the ZARs under-performance compared to other EM currencies.
International news
Minutes from the most recent FOMC meeting were released yesterday and revealed the Feds general dovish approach towards QE tapering and that a steady slowdown is not a foregone conclusion. This may allow for the riskier EM currencies to recover slightly as the year progresses. Investors will now be waiting for the initial jobless claims data due out today ahead of the key US payrolls data tomorrow.
TODAYS KEY DATA POINTS (GMT):
• 09:30 SA SACCI business confidence
• 11:00 SA Manufacturing production n.s.a y/y
• 10:00 EZ Consumer Confidence (final)
• 11:00 DE Industrial production wda y/y
• 12:00 GB BoE rate decision
• 12:45 EZ ECB rate announcement
• 13:30 US Initial jobless claims
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