Forex Commentary 06th March 2009 

Gut Feeling

The ZAR was extremely volatile yesterday trading in a wide range of 10.3000 to 10.6400 with massive swings in between. Another big factor in the ZAR weakening is 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. A market consensus has shown that before year end they looking for a 350 basis point cut. The market at present is sitting very long of US$ and a correction is imminent although it might not materialize just yet, as the trend for ZAR looks to go higher and 11.000 must not be discounted. 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. Interest rates were cut in the UK and The ECU, which had no marked effect on the currencies. Risk aversion is at it highest level and is certainly going to be around while all this turmoil prevails in the markets.

Data Releases

Friday               SA RESERVES    

Friday               US Non Farm Payrolls

Rates

USD / ZAR       10.5400/10.5600

EUR / ZAR       13.2025/13.2325

GBP / ZAR       14.8705/14.9075

ZAR / JPY       9.2525/9.3025

EUR / USD      1.2612/1.2622

GBP / USD      1.4190/1.4200

USD / JPY       97.90/98.00

Morning Commentary