Trade report 05/03/2014
ZAR outlook
USD/ZAR expected range: 10.7100 – 10.8500
As the tension between Russia and the Ukraine appears to have eased for the moment, so has investor aversion to risky assets, which allowed the ZAR and most emerging markets to strengthen yesterday. The Rand was trading at R10.7750/USD at 06:49GMT, only 0.1% softer than its close in New York yesterday, and has remained more or less steady so far today.
Local news
The ZAR is currently steady after a volatile start to the week for the markets. The Association of Mineworkers and Construction Union has revised its wage demands in the hope of bringing the almost 6 week long strike to an end. It is now asking for staggered pay increases compared to the original demand of immediate pay increases. The end to the strike would definitely be a positive for the local currency as it has put extra pressure on economic growth.
International news
Comments from President Putin that he would only use force in the Ukraine as a last resort have eased the tensions in the area and in turn helped calm the volatile markets. There is still much data due for release this week and the key US jobs data and ECB meeting may create a demand for the USD and in turn put pressure on the emerging market currencies.
TODAYS KEY DATA POINTS (GMT):
• 07:15 SA HSBC/Markit PMI
• 09:00 EZ PMI Composite (final)
• 10:00 EZ GDP sa q/q (second reading)
• 13:15 US ADP employment change
• 15:00 US ISM non-manufacturing PMI
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