The ZAR seems a little less volatile over the last two days of last week, as renewed risk appetite firmed the worlds emerging market currencies. The trading range once again for the ZAR seems to be 9.75 to 10.65. Gold over the next few months will look to replace the US$ as a safe haven commodity/currency. The market was rather long of US$ and some profit taking has been taken. Risk aversion at present is very quiet but I think one must exercise caution and not get caught to short as it always rears it head unexpectedly. Retail sales out this week on Wednesday will more than likely paint a gloomy picture as have all the other data. There is very little at present going in favor of the ZAR to keep it below the 10.000 level. There is now ample ammunition for the MPC to cut interest rates to stimulate the economy. I think importers should look at taking cover at any level below 10.000 and start to % cover their proceeds.

Tuesday            US Housing Starts, Permits Unit, ppi, FOMC meeting
Wednesday       SA Retail Sales
Wednesday       US CPI, FOMC Interest Rate decision
Thursday          US Jobless Claims, Leading Ind
Friday               Bernanke Speech

Forex Commentary 16th March 2009