ZAR Forex Report – No news is good news

US President Trump’s speech offered little; he mentioned additional defence budget as well as an infrastructure spend, but there was actually very little fiscal content.

For the first time he spoke “presidential”, but markets moved as little as his speech.

On Wednesday EURZAR and GBPZAR opened at 13.88 and 16.27 respectively, while USDZAR opened below 13 and slowly weakened to 13.10 through the day.

Hawkish comments from Fed officials resulted in the probability of a rate hike in March to jump to 80% from 60%. As a result, the Dollar strengthened, helped along by a recovering US labour market, as jobless claims reached their lowest since March 1973.

Emerging market currencies, including the Rand, weakened as the ZAR pushed through the short term resistance level of 13.15.

The Rand recovered slightly as it opened this week at 13.05 and is expected to trade in a wide range.

Welfare payments and politics aside, there is very little influencing or to get excited about in the local markets – not really a bad thing as this also means political meddling have disappeared for time being.

The ZAR opened at 15.91 against GBP on Tuesday – the first time since 31 October 2013.

Fourth quarter GDP figures came in at a contraction of 0.3% and a year on year growth of 0.7%; worse than the expected growth 0.4%. Worryingly, mining and manufacturing fell by 11.5% and 3.1% respectively.

Despite the poor growth figures, the Rand remains relatively strong, supported by positive Chinese trade data as it remains below 13 versus the USD today. Currently the Rand is trading below 13 to the USD, below 15.85 against GBP and below 13.70 against the Euro – quite remarkable.

Look out for UK budget today, Eurozone GDP and the ECB rate decision (Thursday) and then on Friday another big one; US unemployment rate and non-farm payrolls

ZAR FOREX RATES

 USDZAR  =  13.0012

GBPZAR  =  15.8334

EURZAR  =  13.7286

AUDZAR  =  9.83500

NZDZAR  =  9.03981

CADZAR  =  9.68499

CHFZAR  =  12.8246