ZAR Forex Report – Nothing good can come from nuclear missiles

EUR/USD finally breached the 1.20 level last week as the Dollar weakened.

ZAR opened on Wednesday morning at 12.97 with EUR/ZAR and GBP/ZAR trading at 15.55 and 16.77 respectively.

Wednesday’s local budget figures were poor as expected; we are anticipating to come in way over budget and one can be sure that the ratings agencies are noticing.

With not much news effecting the Rand on Thursday, the market opened on Friday at 13.00 against the USD.

The Rand is still benefiting from a weaker USD as global data seems to be improving; manufacturing PMI figures are picking up along with spending and income – all of which benefits the ZAR and other riskier currencies.

The Bloomberg expectation was that the US created 180,000 non-farm jobs in August.

The official figure came in below expectations at 156,000. However despite a slight USD weakening, the market was mostly unmoved.

We had a quiet day on Monday as the US markets were closed for Labour Day, however “safe haven” currencies and assets benefited from North Korea’s latest nuclear missile test.

Gold has seen its largest increase since April 2015. The strengthening gold price kept the Rand from weakening as much as other emerging market currencies as it closed Monday at 12.98 after opening at 12.92.

Big news today is that the Rand has “exited” the recession as South Africa’s gross domestic product rebounded with 2.5% growth for the second quarter of the year compared to the contractions for the previous two quarters.

The Rand has strengthened on the back of this news and is currently trading at 12.93 to the USD.

It is a quieter news week but we expect the ZAR to be volatile given the North Korean situation and local politics. Look out for ECB rate decision and US jobless claims later this week.

Have a great week, let’s go to work.

ZAR FOREX RATE

USDZAR  = 12.9448

GBPZAR  = 16.7739

EURZAR  = 15.4014

AUDZAR  = 10.3256

NZDZAR  = 9.30941

CADZAR  = 10.4530

CHFZAR  = 13.4992