Forex Morning Commentary 14th January 2009

Gut Feeling

Even as the market reverberated with the news of the judge’s verdict on Zumas case the ZAR was under extreme pressure and by the end of the day was slipping from it lows of the day. There were export dollars pushed into the market as the ZAR touched its resistance level of 10,22. The ZAR seems to have run out of steam as the days go by and my feeling is there will be a correction for a stronger bias on the ZAR. I also believe the ZAR will not strengthen too much and will remain on the back foot for as long as we have the huge trade deficit. Risk aversion for most of last night was reversed as players started to look at high yielding currencies but this is short term as Risk Aversion at the moment is the buzzword. My feeling is Tito Mboweni will cut interest rates by 50BP in line with all the rate cuts by all the Central Banks worldwide. The trading range once again for the ZAR seems to be 9.75 to 10.40.

Data Releases

Wednesday        US Retail sales

Thursday           US Jobless Claims, PPI

Friday               US CPI. Industrial Production

Rates

USD / ZAR       9.8775/9.9375

EUR / ZAR       13.1220/13.1520

GBP / ZAR       14.4130/14.4530

ZAR / JPY       9.0176/9.0276

EUR / USD      1.3285/1.3295

GBP / USD      1.4590/1.4690

USD / JPY       89.90/90.00

Morning Commentary