Forex Morning Commentary 03rd February 2009
Forex
Gut Feeling
There is no direction at the moment and will stay volatile for the foreseeable future. I still think the level of 9.85 is bottomish and I expect the ZAR to make a move to the 10.40 levels. The trading range once again for the ZAR seems to be 9.75 to 10.40. It is still a bit premature to turn positive on the ZAR, as there is still a lot of uncertainty in the global market. There is still a huge amount of banks fiscal stimulus in the market, which in turn will help buoy the currencies concerned. A rate cut is on the cards and market sentiment has changed and looking for a bigger cut of a 100bp. Any bigger cut would affect the foreigners to look at investing into South Africa, which in turn would assist our trade deficit. A cut contrary to the past of weakening the currency would strengthen as the market interprets it as a stimulus for the economy. Once again exporters should be looking to sell off their proceeds on a percentage basis as the ZAR weakens. Profit taking seems to be taken sooner than usual as market players have been horribly burnt over the past few months, this results in the market being less volatile. There is lots of data this week both for SA and the USA, which will show some sort of direction for the currencies.
Data Releases
Tuesday SA CPI, Vehicle Sales
Wednesday SA MPC Meeting
Thursday SA MPC Int Rate Decision
Thursday US JoblessClaims, Durable Goods, Factory orders
Friday SA Reserves, Pres Motalanthe State of the Nation Speech
Friday US Non Farm Payrolls, Unemployment
Rates
USD / ZAR 10.0940/10.1940
EUR / ZAR 12.9617/13.0617
GBP / ZAR 14.3153/14.3653
ZAR / JPY 8.7816/8.7826
EUR / USD 1.2835/1.2845
GBP / USD 1.4185/1.4195
USD / JPY 89.55/89.65
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