Trade report 28/02/2014
ZAR outlook
USD/ZAR expected range: 10.7500 – 10.9000
The ZAR strengthened yesterday as the budget speech was more heavily absorbed by economists and described as “mainly credit positive”. The ZAR was trading at R10.7250/USD at 06:29GMT this morning, down 0.3% from yesterdays close in New York. The local currency may dip today should trade data disappoint, but losses should not be significant.
Local news
Ratings agencies have commented on the budget speech by Gordhan Pravin this week, and the general feeling is a positive one which has helped the ZAR firm up this week along with a generally weaker USD. Fitch noted that the government is trying to stabilise debt ratios, while supporting the economy, but that the targets identified will be challenging. Moodys comments were more upbeat and it seems the threat of another ratings downgrade have been minimised for the moment.
International news
Data due out today looks set to help the ZAR maintain its recent gains unless there are surprises out of the US releases. The Euro has strengthened against its major peers with upbeat news over inflation, which coupled with the good unemployment data released this week, has helped the EUR reach its best level versus the USD so far this year.
TODAYS KEY DATA POINTS (GMT):
• 06:00 SA M3 money supply y/y
• 06:00 SA Private sector credit y/y
• 12:00 SA Government budget balance (ZAR)
• 12:00 SA Trade balance
• 10:00 EZ CPI estimates y/y
• 13:30 US GDP q/q annualized (second reading)
• 14:45 US Chicago PMI
• 14:55 US Michigan consumer confidence
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Friday, 28 February 2014
Thursday, 27 February 2014
Rand dips as emerging markets feel renewed pressure
Trade report 27/02/2014
ZAR outlook
USD/ZAR expected range: 10.7500 – 10.9000
The ZAR has been trading steadily this week and managed to firm up nicely, but slipped yesterday after Gordhan Pravin’s budget speech and renewed international pressure on emerging market currencies. The ZAR dropped 0.8% yesterday and was trading at R10.8150/USD at 15:35GMT yesterday afternoon.
Local news
Focus yesterday was mainly on the budget speech which was encouraging in the fact that despite forecasted economic growth being trimmed to 2.7%, the forecasted budget deficit has been revised lower for the entire FY13-15 period and the govt. has managed to avoid higher income taxes which is the best news taxpayers could hope for. The lower growth prediction was expected according to economists so the main reason for the ZAR’s slip yesterday was more due to international sentiment.
International news
EM currencies felt the pressure yesterday after the news that Russian armed forces were put on alert by President Putin, and although Russia stated that the action was “unrelated to events in the Ukraine", it has raised tensions in the area. Despite this the EUR has managed to strengthen against the GBP after positive unemployment data was released earlier out of Germany.
TODAYS KEY DATA POINTS (GMT):
• 09:30 SA PPI y/y
• 08:55 DE Unemployment rate sa
• 13:00 DE CPI y/y (preliminary)
• 13:00 EZ ECB’s Weidmann speaks
• 13:30 US Durable goods orders m/m
• 13:30 US Initial jobless claims
• 15:00 US Fed Chair Yellen testifies to the Senate
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ZAR outlook
USD/ZAR expected range: 10.7500 – 10.9000
The ZAR has been trading steadily this week and managed to firm up nicely, but slipped yesterday after Gordhan Pravin’s budget speech and renewed international pressure on emerging market currencies. The ZAR dropped 0.8% yesterday and was trading at R10.8150/USD at 15:35GMT yesterday afternoon.
Local news
Focus yesterday was mainly on the budget speech which was encouraging in the fact that despite forecasted economic growth being trimmed to 2.7%, the forecasted budget deficit has been revised lower for the entire FY13-15 period and the govt. has managed to avoid higher income taxes which is the best news taxpayers could hope for. The lower growth prediction was expected according to economists so the main reason for the ZAR’s slip yesterday was more due to international sentiment.
International news
EM currencies felt the pressure yesterday after the news that Russian armed forces were put on alert by President Putin, and although Russia stated that the action was “unrelated to events in the Ukraine", it has raised tensions in the area. Despite this the EUR has managed to strengthen against the GBP after positive unemployment data was released earlier out of Germany.
TODAYS KEY DATA POINTS (GMT):
• 09:30 SA PPI y/y
• 08:55 DE Unemployment rate sa
• 13:00 DE CPI y/y (preliminary)
• 13:00 EZ ECB’s Weidmann speaks
• 13:30 US Durable goods orders m/m
• 13:30 US Initial jobless claims
• 15:00 US Fed Chair Yellen testifies to the Senate
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Tuesday, 25 February 2014
Rand firm ahead of budget speech
Trade report 25/02/2014
ZAR outlook
USD/ZAR expected range: 10.7500 – 10.9000
The Rand surprised yesterday and firmed to its strongest position in over a week despite negative data released out of China. The ZAR was trading at R10.8270 at 06:45GMT, 0.3% off its close in New York last night of R10.7940/USD.
Local news
Today sees the release of local GDP news which investors are hoping will help the ZAR hold onto its recent gains against the USD. This comes ahead of the budget speech by Pravin Gordhan tomorrow where the Finance Minister is expected to maintain a firm grip on public spending in order to encourage stronger economic growth in the longer term.
International news
A drop in property prices and reduced bank lending in China has emphasised the slowdown in the Chinese economy, which will keep the pressure on many EM currencies, heavily reliant on trade with the economic giant. Meanwhile the GBP has strengthened after data released reveals that the number of new mortgages approved has risen to the highest number in 6 years, adding to the theory that the UK economy is recovering steadily.
TODAYS KEY DATA POINTS (GMT):
• 07:00 SA Leading Indicator
• 09:30 SA Bond auction (R2030 – R1bn; R2037 – 800mn; R2048 – 550mn)
• 09:30 SA GDP y/y nsa
• 07:00 DE GDP y/y nsa (final)
• 14:00 US House price index m/m
• 14:00 US S&P/Case house price composite – 20y/y
• 15:00 US Consumer confidence
• 15:00 US Richmond Fed manufacturing index
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ZAR outlook
USD/ZAR expected range: 10.7500 – 10.9000
The Rand surprised yesterday and firmed to its strongest position in over a week despite negative data released out of China. The ZAR was trading at R10.8270 at 06:45GMT, 0.3% off its close in New York last night of R10.7940/USD.
Local news
Today sees the release of local GDP news which investors are hoping will help the ZAR hold onto its recent gains against the USD. This comes ahead of the budget speech by Pravin Gordhan tomorrow where the Finance Minister is expected to maintain a firm grip on public spending in order to encourage stronger economic growth in the longer term.
International news
A drop in property prices and reduced bank lending in China has emphasised the slowdown in the Chinese economy, which will keep the pressure on many EM currencies, heavily reliant on trade with the economic giant. Meanwhile the GBP has strengthened after data released reveals that the number of new mortgages approved has risen to the highest number in 6 years, adding to the theory that the UK economy is recovering steadily.
TODAYS KEY DATA POINTS (GMT):
• 07:00 SA Leading Indicator
• 09:30 SA Bond auction (R2030 – R1bn; R2037 – 800mn; R2048 – 550mn)
• 09:30 SA GDP y/y nsa
• 07:00 DE GDP y/y nsa (final)
• 14:00 US House price index m/m
• 14:00 US S&P/Case house price composite – 20y/y
• 15:00 US Consumer confidence
• 15:00 US Richmond Fed manufacturing index
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Monday, 24 February 2014
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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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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Thursday, 20 February 2014
Rand loses ground
Trade report 20/02/2014
ZAR outlook
USD/ZAR expected range: 11.0100 – 11.1600
The Rand slipped below the key R11.00/USD level late yesterday afternoon as emerging market sentiment took a turn for the worse. The ZAR was trading at R11.0625/USD at 06:07GMT, down almost 0.2% from its close in New York yesterday evening and the first time this week it has ended a session below 11.
Local news
Local data revealed yesterday that consumer inflation has risen from 5.4% in December to a higher than anticipated 5.8% in January. The ZAR initially strengthened on this news but this did not last long as investors started selling off emerging market assets. Ongoing strikes also keep the pressure on the Rand as they have now cost the economy an estimated R4.4bn in revenue.
International news
Two main factors have caused the recent sell off in emerging market assets. First being the poor data out of China. HSBC Chinese manufacturing data has fallen to a 7 month low in Feb of 48.3 as employment fell at its fastest pace in 5 years. Secondly speakers from the Fed yesterday re-iterated the positive outlook on the US growth economy and the FOMC minutes released pointed to the continuing of the Fed taper in a predictable steady manner.
TODAYS KEY DATA POINTS (GMT):
• 07:00 DE Producer prices y/y
• 08:30 DE PMI manufacturing (advance)
• 09:00 EZ PMI manufacturing (advance)
• 13:30 US CPI y/y
• 13:30 US Initial jobless claims
• 13:58 US Markit PMI manufacturing
• 15:00 US Philadelphia Fed index
• 15:00 EZ Consumer Confidence
• 15:00 US Leading Indicators
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ZAR outlook
USD/ZAR expected range: 11.0100 – 11.1600
The Rand slipped below the key R11.00/USD level late yesterday afternoon as emerging market sentiment took a turn for the worse. The ZAR was trading at R11.0625/USD at 06:07GMT, down almost 0.2% from its close in New York yesterday evening and the first time this week it has ended a session below 11.
Local news
Local data revealed yesterday that consumer inflation has risen from 5.4% in December to a higher than anticipated 5.8% in January. The ZAR initially strengthened on this news but this did not last long as investors started selling off emerging market assets. Ongoing strikes also keep the pressure on the Rand as they have now cost the economy an estimated R4.4bn in revenue.
International news
Two main factors have caused the recent sell off in emerging market assets. First being the poor data out of China. HSBC Chinese manufacturing data has fallen to a 7 month low in Feb of 48.3 as employment fell at its fastest pace in 5 years. Secondly speakers from the Fed yesterday re-iterated the positive outlook on the US growth economy and the FOMC minutes released pointed to the continuing of the Fed taper in a predictable steady manner.
TODAYS KEY DATA POINTS (GMT):
• 07:00 DE Producer prices y/y
• 08:30 DE PMI manufacturing (advance)
• 09:00 EZ PMI manufacturing (advance)
• 13:30 US CPI y/y
• 13:30 US Initial jobless claims
• 13:58 US Markit PMI manufacturing
• 15:00 US Philadelphia Fed index
• 15:00 EZ Consumer Confidence
• 15:00 US Leading Indicators
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Tuesday, 18 February 2014
Rand steady after quieter start to the week
Trade report 18/02/2014
ZAR outlook
USD/ZAR expected range: 10.7700 – 10.9200
Yesterday was a quiet day in the markets as the US markets enjoyed a public holiday. This allowed emerging market currencies to consolidate their recent gains due to a broadly weaker USD. The Rand was trading at R10.8625/USD at 06:11GMT this morning, which was 0.4% down from its close of R10.8200/USD in New York yesterday evening.
Local news
Upbeat emerging market sentiment has supported the ZAR over the past few days and helped it break through the psychological R11.00/USD level, but local issues continue to leave the ZAR vulnerable. Ongoing labour unrest which may now result in more job losses continues to damage investor confidence and South Africa’s twin deficits remain uncomfortably high. Investors will be hoping for positive CPI data tomorrow which may help the Rand maintain its recent gains.
International news
Today sees the release of German/EZ ZEW economic sentiment as well as US Empire manufacturing data, but this will unlikely have any significant effect in the markets. Investors will be more eagerly awaiting tomorrows Fed speeches and US data as well as the local CPI release.
TODAYS KEY DATA POINTS (GMT):
• 09:30 SA Bond auction (R2023 – 550mn; R2030 – 1bn; R209 – 800mn)
• 09:00 EZ Current account (seasonally adjusted) (EUR)
• 09:30 GB CPI y/y
• 09:30 GB PPI output core y/y n.s.a
• 10:00 DE ZEW economic sentiment
• 13:30 US Empire manufacturing
• 15:00 US NAHB Housing market index
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ZAR outlook
USD/ZAR expected range: 10.7700 – 10.9200
Yesterday was a quiet day in the markets as the US markets enjoyed a public holiday. This allowed emerging market currencies to consolidate their recent gains due to a broadly weaker USD. The Rand was trading at R10.8625/USD at 06:11GMT this morning, which was 0.4% down from its close of R10.8200/USD in New York yesterday evening.
Local news
Upbeat emerging market sentiment has supported the ZAR over the past few days and helped it break through the psychological R11.00/USD level, but local issues continue to leave the ZAR vulnerable. Ongoing labour unrest which may now result in more job losses continues to damage investor confidence and South Africa’s twin deficits remain uncomfortably high. Investors will be hoping for positive CPI data tomorrow which may help the Rand maintain its recent gains.
International news
Today sees the release of German/EZ ZEW economic sentiment as well as US Empire manufacturing data, but this will unlikely have any significant effect in the markets. Investors will be more eagerly awaiting tomorrows Fed speeches and US data as well as the local CPI release.
TODAYS KEY DATA POINTS (GMT):
• 09:30 SA Bond auction (R2023 – 550mn; R2030 – 1bn; R209 – 800mn)
• 09:00 EZ Current account (seasonally adjusted) (EUR)
• 09:30 GB CPI y/y
• 09:30 GB PPI output core y/y n.s.a
• 10:00 DE ZEW economic sentiment
• 13:30 US Empire manufacturing
• 15:00 US NAHB Housing market index
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Monday, 17 February 2014
ZAR enjoys multi-week highs
Trade report 17/02/2014
ZAR outlook
USD/ZAR expected range: 10.8100 – 11.9400
The ZAR has managed to firm up nicely over the last few sessions as the USD experiences a period of broad weakness. The main reasons for this are firstly signs of an improving UK economy and secondly recent softer data out of the US which has been interpreted as an indication that the Fed may slow its pace of QE tapering. The Rand was trading at R10.8580/USD at 06:54GMT this morning, very close to its close in New York on Friday and the second consecutive session where it managed to close below R11.00/USD.
Local news
The strengthening Rand is mainly due to international market sentiment rather than local at the moment and SA CPI data due out this week will unlikely have much of an impact. Meanwhile the current account deficit remains large as the recent rate hike was too modest to make much of a dent, but the SARB is very weary of debt-ridden consumers and needing to maintain a decent level of economic growth.
International news
Chinese sentiment has improved over the last week with upbeat data released indicating that January saw the highest volume of loans of any month over the last four years, which would suggest that the economy may not be slowing down as much as has been feared. This is good news for emerging market currencies and with it being a quieter day as the US markets celebrate Presidents Day Holiday, they should be able to consolidate their recent gains.
TODAYS KEY DATA POINTS (GMT):
• US Market holiday – Presidents Day
• O/N JP GDP q/q annualized (preliminary)
• 00:01 GB Rightmove house prices y/y
• 04:30 JP Industrial production y/y (final)
• 11:00 US ECB’s Nowotny speaks
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ZAR outlook
USD/ZAR expected range: 10.8100 – 11.9400
The ZAR has managed to firm up nicely over the last few sessions as the USD experiences a period of broad weakness. The main reasons for this are firstly signs of an improving UK economy and secondly recent softer data out of the US which has been interpreted as an indication that the Fed may slow its pace of QE tapering. The Rand was trading at R10.8580/USD at 06:54GMT this morning, very close to its close in New York on Friday and the second consecutive session where it managed to close below R11.00/USD.
Local news
The strengthening Rand is mainly due to international market sentiment rather than local at the moment and SA CPI data due out this week will unlikely have much of an impact. Meanwhile the current account deficit remains large as the recent rate hike was too modest to make much of a dent, but the SARB is very weary of debt-ridden consumers and needing to maintain a decent level of economic growth.
International news
Chinese sentiment has improved over the last week with upbeat data released indicating that January saw the highest volume of loans of any month over the last four years, which would suggest that the economy may not be slowing down as much as has been feared. This is good news for emerging market currencies and with it being a quieter day as the US markets celebrate Presidents Day Holiday, they should be able to consolidate their recent gains.
TODAYS KEY DATA POINTS (GMT):
• US Market holiday – Presidents Day
• O/N JP GDP q/q annualized (preliminary)
• 00:01 GB Rightmove house prices y/y
• 04:30 JP Industrial production y/y (final)
• 11:00 US ECB’s Nowotny speaks
Foreign exchange South Africa – Let one of our professional consultants at Currency Solutions assist you. To know more about how we can help you Contact Us
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