Not the best forex trading week for the Rand as it traded in a range of over 2%, strengthening to 12.86 against the USD last week before depreciating to the 13.20 where it is currently sitting.
Last Wednesday the ZAR opened at 13.07 against the USD as the US Fed kept interest rates, as expected, unchanged – poor inflation data could be a primary reason.
As a result the USD weakened; EURUSD traded as high as 1.177. ZAR also strengthened, opening on Thursday morning at 12.86 against the USD.
With little local data being released towards the business end of last week, the ZAR reacted to Dollar movements; the USD gained back some of its losses on Thurs afternoon and the Rand opened on Friday at 13.00. With Friday being a quiet day on the news front, trade was thin and the trading range narrow.
This week being an end of the month week, we can expect a volatile currency as data is released.
The Rand opened the week at 12.99 against the USD before weakening aggressively against all currencies as credit rating fears returned. Moody’s pointed out that growth remains a concern – not good news considering they are scheduled to decide on SA’s credit rating in 10 days’ time.
While the Moody’s report is reason to be worried, SA posted a trade surplus in June, causing the second quarter surplus to rise to the largest in six years. Foreigners have been net buyers of SA bonds over the last 2 and a half weeks as emerging markets benefited from carry trades.
If you’re in SA, you are probably more focussed on the fuel price increase tomorrow, but also keep an eye out on the Aussie rate decision, US home sales and Eurozone GDP. Then on Friday it is the big one – US non-farm payrolls.
ZAR FOREX RATE
USDZAR = 13.2908
GBPZAR = 17.5566
EURZAR = 15.7117
AUDZAR = 10.6133
NZDZAR = 9.93446
CADZAR = 10.6479
CHFZAR = 13.7588
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