Forex Commentary 04th March 2009

Gut Feeling

The ZAR market is certainly volatile and scary, as all the stats that are emerging bring nothing but gloom. Another big factor in the ZAR weakening on Friday was the huge trade deficit. The trading range once again for the ZAR seems to be 9.75 to 10.65. Keep an eye on Gold over the next few months as a safe haven commodity. This will happen but for now I see the ZAR a bit weaker. I like to stay long of US$ below 10.0000 and sell US $ over the 10.20 level. A market consensus has shown that before year end they looking for a 350 basis point cut. My prediction is that the ZAR will once again need to break through the 10,23 level decisively and if so 10.80 is on the cards. Friday keep a watch out at trade figures. There were exporters in the market yesterday, which pulled the ZAR back below the 10.50 levels. I think there will be more exporters around at these levels.

Data Releases

Thursday           US Jobless Claims, Factory Orders,

Thursday           UK and ECB Rate Cut

Friday               SA RESERVES    

Friday               US Non Farm Payrolls

Rates

USD / ZAR       10.5400/10.5600

EUR / ZAR       13.2025/13.2125

GBP / ZAR       14.7835/14.7935

ZAR / JPY       9.3195/9.3395

EUR / USD      1.2527/1.2537

GBP / USD      1.4032/1.4042

USD / JPY       98.48/98.58

Morning Commentary