Forex Commentary 19th February 2009

Forex

Gut Feeling

Once again the 10.23 level proved a major resistance, the ZAR strengthened on the back of bad US figures. The market I think is very long of US$ and a correction is immenent, which could pull the ZAR to the 9.85 level. The ZAR is still under pressure and can trade weaker to the 10.40 levels. The news out of Eastern Europe is causing a new wave of risk aversion as the recession is purported to be more severe. The trading range once again for the ZAR seems to be 9.75 to 10.40. Market must exercise caution, as the volatility is causing traders lots of anxiety, as there is a lack of direction both ways. Keep an eye on Gold over the next few months as a safe haven commodity. Gold has certainly kept its sheen with all the turmoil in the market and I see the gold price above US $ 1000.00. Importers should relook at their covering on a % basis as it looks like all emerging markets will be under extreme pressure form here on in. Carry trades seem to have come to a temporary halt, but as it is a buzzword, be careful of the market capitalizing on better positions.

Data Releases

Friday               US CPI, Real Earnings

Rates

USD / ZAR       10.1430/10.2430

EUR / ZAR       12.7730/12.8030

GBP / ZAR       14.4258/14.4558

ZAR / JPY       9.1829/9.2129

EUR / USD      1.2594/1.2604

GBP / USD      1.4230/1.4240

USD / JPY       94.05/94.15

Morning Commentary