ZAR holding onto gains

Trade report 24/02/2014

ZAR outlook

USD/ZAR expected range: 10.9000 – 11.0300

The Rand managed to firm up towards the end of last week and has been managing to hold relatively steady after the USD took a knock due to the release of a string of softer than anticipated US data.  The ZAR was trading at R10.9425/USD at 08:42am, very close to its close in New York on Friday evening of R10.9350/USD.

Local news

The local currency has benefited recently off the weaker USD and the ease on global risk aversion.  With some key local data due out this week, it could be an important week for the ZAR, with investors hoping the currency can continue to make gains.  Q4 GDP, January money supply and PCSE trade figures are all due out this week as well as the budget speech on Wednesday, which is an important day for the bond market.

International news

Industrial production data, housing starts and permits and existing home sales data released last week were all softer than expected causing to USD to weaken against most of its peers and giving emerging market currencies a reprieve.  The resolution to the Ukraine political crisis where parliament removed the president over the week-end, has also helped EMs stabilise after a volatile few days last week.

TODAYS KEY DATA POINTS (GMT):

• 01:30 CN China property prices
• 09:00 DE IFO business climate
• 10:00 EZ CPI y/y (final)
• 13:30 US Chicago Fed activity index
• 15:30 US Dallas Fed manufacturing activity

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