taxpayers jacob zuma

(Gallo Images / The Times / Esa Alexander)

Rand report: It’s been a quiet week, relax

For now, any ZAR weakness needs to be seen against the backdrop of a defensive USD. The post Trump rally has now been undone as the USD is trading at levels last seen a year and a half ago. The Greenback is staying above the 13.00 USD-ZAR mark.

taxpayers jacob zuma

(Gallo Images / The Times / Esa Alexander)

On the data front, previous data releases in the US showing a healthy surplus will likely re-occur and the money supply figures will highlight a credit cycle that has tightened considerably to remain tight. This indicates that the current environment is conducive to a strong ZAR.

We remain positive on the ZAR with the major risks this week being the political tensions caused by North Korea and their missile test over Japan. On the home front, Zuma’s session in parliament on Thursday will likely move the Rand.

In the absence of any significant data releases in South Africa this week, it is a good idea to keep an eye on the data releases coming from the US this week, as they are likely to be the main cause of Rand volatility.

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The data releases to watch out for are:

Day What’s happening Why it’s important
Wednesday US Gross Domestic Product Annualized (Q2) A small increase is expected, which should be seen a bullish for the USD.
Thursday US Initial Jobless Claims (25 August) An increase is expected, which indicates weakness in the labor market this will be USD-negative.
Friday US Nonfarm Payrolls (Aug) A low reading is expected, which is generally a bearish result for the USD.

 

– Chris Williams

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