Trade report 11/02/2014
ZAR outlook
USD/ZAR expected range: 11.0500 – 11.2100
The Rand has remained under pressure over the past few days as ongoing strikes have not yet been resolved by the mediating parties, although a weaker USD ahead of the new US Federal Reserve chairperson Janet Yellen’s speech to Congress, is helping the Rand stay more or less steady. This morning the Rand was trading at R11.1245 at 06:45GMT, slightly firmer than its close in New York on Monday.
Local news
Strike action in the platinum sector is now into its third week which is keeping a negative spotlight on the South African economy, and in turn putting pressure on the local currency which was the second worst performer of the EM currencies yesterday. The markets will be keenly awaiting unemployment and manufacturing data due for release today, as this may offer insight into whether the Reserve Bank may increase interest rates again this year, after its surprise rate hike last month.
International news
The USD is trading slightly weaker today ahead of Janet Yellens speech to Congress which is expected to be dovish in its nature. In other news HSBC released its EM composite PMI yesterday which noted the slowdown below the neutral 50.0 mark by China. Investors are nervous of a further slowdown by the Chinese economy during the year and the markets will therefore be paying close attention to the Chinese trade data, due for release soon, which may put further pressure on EM’s should it be disappointing.
TODAYS KEY DATA POINTS (GMT):
• 09:30 SA Bond auction (R2030 – 1bn; R2037 – 800mn; R2048 – 550mn)
• 09:30 SA Unemployment rate
• 11:00 SA Manufacturing production n.s.a. y/y
• JP Market holiday – National Founding Day
• 15:00 US Fed Chairman Yellen testifies before the House
• 15:00 US Wholesale inventories m/m
• 15:00 US Wholesale sales m/m
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