Forex Morning Commentary 09th February 2009

Forex

Gut Feeling

The market has certainly seen the rate cut plus the imminent bail out package as a good omen for the market. The market is certainly jig sawing around, but it still seems that 10.23 is a tough nut to break and once again it showed its resilience at that level. I still think the level of 9.85 is bottomish and I expect the market to look at taking some profit initially and force ZAR back to 10.00 level. 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. Once again I hope exporters did get rid of their proceeds.  Importers should also start looking at % covering, as there is a lot of bad news out in the market. A lot of the ZAR market expectations of what is to happen, is basing its move on the Interest rate cuts and as Tito Mboweni intimated that another early meeting of the MPC could be called if any adverse news emerges. The figures coming out of the USA are still bad and the US$ is under pressure. Market must exercise caution as I expect the market to be very volatile.

Data Releases

Tuesday            SA Mnfrs

Tuesday            US Geitner &Bernanke to testify

Wednesday       US Housing Fin Committee

Thursday          SA Mining Prod and sales

Thursday          US Retail Sales, Business Inventory

Rates

USD / ZAR       9.6500/9.7500

EUR / ZAR       12.4360/12.5360

GBP / ZAR       14.1875/14.2075

ZAR / JPY       9.3300/9.3500

EUR / USD      1.2895/1.3005

GBP / USD      1.4700/1.4710

USD / JPY       91.00/91.10

Morning Commentary