Trade report 27/02/2014
ZAR outlook
USD/ZAR expected range: 10.7500 – 10.9000
The ZAR has been trading steadily this week and managed to firm up nicely, but slipped yesterday after Gordhan Pravin’s budget speech and renewed international pressure on emerging market currencies. The ZAR dropped 0.8% yesterday and was trading at R10.8150/USD at 15:35GMT yesterday afternoon.
Local news
Focus yesterday was mainly on the budget speech which was encouraging in the fact that despite forecasted economic growth being trimmed to 2.7%, the forecasted budget deficit has been revised lower for the entire FY13-15 period and the govt. has managed to avoid higher income taxes which is the best news taxpayers could hope for. The lower growth prediction was expected according to economists so the main reason for the ZAR’s slip yesterday was more due to international sentiment.
International news
EM currencies felt the pressure yesterday after the news that Russian armed forces were put on alert by President Putin, and although Russia stated that the action was “unrelated to events in the Ukraine", it has raised tensions in the area. Despite this the EUR has managed to strengthen against the GBP after positive unemployment data was released earlier out of Germany.
TODAYS KEY DATA POINTS (GMT):
• 09:30 SA PPI y/y
• 08:55 DE Unemployment rate sa
• 13:00 DE CPI y/y (preliminary)
• 13:00 EZ ECB’s Weidmann speaks
• 13:30 US Durable goods orders m/m
• 13:30 US Initial jobless claims
• 15:00 US Fed Chair Yellen testifies to the Senate
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