Friday, 7 February 2014

ZAR holding onto gains ahead of US data releases

Trade report 07/02/2014

ZAR outlook

USD/ZAR expected range: 11.0500 – 11.2100

The ZAR managed to gain over 1% yesterday, even breaking the R11.00/USD level briefly, as the currency tracked other emerging markets that were benefitting off a weaker USD.  The rand was at R11.0350/USD at 06:16GMT very close to its overnight close in New York.

Local news

News of ongoing strike action and other domestic issues seems to have been put to one side as the local currency managed to rally against the USD yesterday moving in line with other emerging market currencies.  Movement of the Rand in general at the moment seems dependent on international data.  With some key data due out today it will be interesting to note if the Rand can hold onto its recent gains.


International news

The USD has been under pressure this week and investors will be watching closely for news on key nonfarm-payrolls and unemployment data which is due for release later today.  General expectation in the markets is one of a significant improvement which will most likely help the USD strengthen but in turn will see the ZAR and other EMs lose some of their gains they have made during the week.

TODAYS KEY DATA POINTS (GMT):

• 06:00 SA Net reserves
• 09:30 SA ILB auction (R800mn)
• 07:00 DE Trade balance (EUR)
• 09:30 GB Visible trade balance (GBP)
• 09:30 GB Industrial production y/y
• 11:00 DE Industrial production wda y/y
• 13:30 US Change in nonfarm payrolls
• 13:30 US Unemployment rate


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