Trade report 13/02/2014
ZAR outlook
USD/ZAR expected range: 10.9900 – 11.1400
The ZAR has been holding relatively steady against the USD over the last day, but has failed to maintain its level below R11.00/USD. It reached a high of R10.9300/USD but never managed to hold onto the gains despite better than anticipated retail sales data being released. The currency was at R11.0495/USD at 08:16 this morning, 0.4% off its close in New York on Wednesday evening.
Local news
Yesterday’s retail sales data came in better than expected at 3.5% y/y after economists expected growth of 2.7%y/y. Despite this the ZAR failed to hold onto its recent gains and broke above the key R11.00/USD level. The currency is struggling against negative investor sentiment with ongoing strikes and protests in townships, and yesterday’s tension between the ANC and the Democratic Alliance only managed to highlight this. The spotlight today will be on President Jacob Zuma’s state of the Nation address, his last before the elections in May.
International news
Today sees the release of US retail sales and jobs data which investors will be paying close attention to, knowing that the Fed will be basing further taper decisions on this, and coming data releases. Meanwhile disappointing data out of the EZ, including record high unemployment levels in Greece, has caused the EUR to lose its recent gains against the GBP.
TODAYS KEY DATA POINTS (GMT):
• 09:30 SA Mining production y/y
• 17:00 SA President Zuma delivers State of the Nation address
• 07:00 DE CPI y/y (final)
• 09:00 EZ ECB releases monthly report
• 13:30 US Advance Retail sales m/m
• 13:30 US Initial jobless claims
• 15:00 US Business inventories m/m
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