Trade report 18/02/2014
ZAR outlook
USD/ZAR expected range: 10.7700 – 10.9200
Yesterday was a quiet day in the markets as the US markets enjoyed a public holiday. This allowed emerging market currencies to consolidate their recent gains due to a broadly weaker USD. The Rand was trading at R10.8625/USD at 06:11GMT this morning, which was 0.4% down from its close of R10.8200/USD in New York yesterday evening.
Local news
Upbeat emerging market sentiment has supported the ZAR over the past few days and helped it break through the psychological R11.00/USD level, but local issues continue to leave the ZAR vulnerable. Ongoing labour unrest which may now result in more job losses continues to damage investor confidence and South Africa’s twin deficits remain uncomfortably high. Investors will be hoping for positive CPI data tomorrow which may help the Rand maintain its recent gains.
International news
Today sees the release of German/EZ ZEW economic sentiment as well as US Empire manufacturing data, but this will unlikely have any significant effect in the markets. Investors will be more eagerly awaiting tomorrows Fed speeches and US data as well as the local CPI release.
TODAYS KEY DATA POINTS (GMT):
• 09:30 SA Bond auction (R2023 – 550mn; R2030 – 1bn; R209 – 800mn)
• 09:00 EZ Current account (seasonally adjusted) (EUR)
• 09:30 GB CPI y/y
• 09:30 GB PPI output core y/y n.s.a
• 10:00 DE ZEW economic sentiment
• 13:30 US Empire manufacturing
• 15:00 US NAHB Housing market index
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