Trade report 06/02/2014
ZAR outlook
USD/ZAR expected range: 11.0500 – 11.2100
There was little action in the markets yesterday for EM currencies and they seem to be going through a period of consolidation as investor sentiment picks up again slowly. The Rand has managed to move away from its 5 year low of last week but has failed to break through the R11.06/07/USD level. This morning at 06:47GMT the local currency was sitting at R11.0950/USD slightly improved from its overnight close in New York.
Local news
Negative investor sentiment, in part due to the ongoing strike by the Association of Mineworkers and Construction Union is thought to be holding the ZAR back and keeping it from breaking through the key R11.06/07 level. The CCMA has now stepped in to try and help the parties reach a settlement but each day lost puts added strain on the economy.
International news
ADP data out of the US yesterday was lower than expected, but still strong enough to indicate that tomorrow’s payroll figures shouldn’t provide any major surprises. PMI data also increased to 54.0 from 53.0. This US data increases speculation that the Fed will continue with its taper plan at the next FOMC meeting. Another point of interest today is the BoE rate decision which markets anticipate will be a doveish decision.
TODAYS KEY DATA POINTS (GMT):
• 11:00 DE Factory orders y/y
• 12:00 GB BoE rate decision
• 12:45 EZ ECB refi rate announcement
• 13:30 EZ ECB’s Draghi holds press conference
• 13:30 US Trade balance (USD)
• 13:30 US Initial jobless claims
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