Trade report 28/02/2014
ZAR outlook
USD/ZAR expected range: 10.7500 – 10.9000
The ZAR strengthened yesterday as the budget speech was more heavily absorbed by economists and described as “mainly credit positive”. The ZAR was trading at R10.7250/USD at 06:29GMT this morning, down 0.3% from yesterdays close in New York. The local currency may dip today should trade data disappoint, but losses should not be significant.
Local news
Ratings agencies have commented on the budget speech by Gordhan Pravin this week, and the general feeling is a positive one which has helped the ZAR firm up this week along with a generally weaker USD. Fitch noted that the government is trying to stabilise debt ratios, while supporting the economy, but that the targets identified will be challenging. Moodys comments were more upbeat and it seems the threat of another ratings downgrade have been minimised for the moment.
International news
Data due out today looks set to help the ZAR maintain its recent gains unless there are surprises out of the US releases. The Euro has strengthened against its major peers with upbeat news over inflation, which coupled with the good unemployment data released this week, has helped the EUR reach its best level versus the USD so far this year.
TODAYS KEY DATA POINTS (GMT):
• 06:00 SA M3 money supply y/y
• 06:00 SA Private sector credit y/y
• 12:00 SA Government budget balance (ZAR)
• 12:00 SA Trade balance
• 10:00 EZ CPI estimates y/y
• 13:30 US GDP q/q annualized (second reading)
• 14:45 US Chicago PMI
• 14:55 US Michigan consumer confidence
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