RDG BROKERS » economy

Budget: Soccer World Cup

RDG Brokers — Tue, 19 Jan 2010 23:59:04 +0000

Good Morning, We once again managed to trade sideways, as most companies are probably busy with budget and strategy meetings. Local importers and exporters showed little interest in the currency markets yesterday. Most traders are still trying to figure out what impact the Soccer World Cup will have on the local currency. For now we remain in tight ranges until fresh economic indicators give some direction to the currency markets. Developed countries may slip back into recession if they abandon strategies deployed to battle the global financial crisis too early, the head of the International Monetary Fund warned on Monday. Recovery in private demand and employment are necessary conditions for governments to begin unwinding policies designed to support their economies, though the right timing depends on specific conditions in each nation, Dominique Strauss-Kahn said. “Recovery in advanced economies has been sluggish,” he told reporters in Tokyo. “We have to be cautious because the recovery has been fragile.” Marek Belka, the head of the IMF’s European department, echoed Strauss-Kahn’s comments, saying the continent’s economy was not yet on solid ground.
Current levels
Rand / Usd	7.3800-7.4300
Rand / Euro	10.6200-10.6700
Rand / Sterling	12.1000-12.1500
Jpy / Rand	12.20-12.25
Jpy / Usd	90.43
Usd / Euro	1.4388
Gbp / Usd	1.6400
Gold	$1 136.00
Expected ranges
Rand / Usd	7.3500-7.5500
Rand / Euro	10.5500-10.7500
Rand / Sterling	12.0000-12.2000
Jpy / Rand	12.10-12.30

All time High for Gold

RDG Brokers — Wed, 02 Dec 2009 07:34:09 +0000

South Africa’s rand is currently testing the 7.30/$ mark after the euro remained above 1.50 a dollar and gold is at fresh all time highs trading at $1215 this morning. All these factors and the soccer world cup only six months away with massive inflows expected due to the world’s biggest sporting event will continue to support the rand. We should see importer demand below 7.30/$ however the bullish sentiment will prevail for now. The International Monetary Fund and finance ministers from the 16 countries using the euro believe the single currency is overvalued, the ministers’ chairman said on Tuesday. The head of the IMF’s European department, Marek Belka, presented a regular report on the euro zone economy to the currency area’s finance ministers and European Central Bank President Jean-Claude Trichet. “We agreed with him when he said that the euro was overvalued and that some adjustment in that area would be desirable,” the Euro group’s chairman, Jean-Claude Juncker, told a news conference.
Current levels
Rand / Usd	7.2800-7.3300
Rand / Euro	11.0000-11.0500
Rand / Sterling	12.1000-12.1500
Jpy / Rand	11.90-11.95
Jpy / Usd	86.98
Usd / Euro	1.5095
Gbp / Usd	1.6600
Gold	$1 214.00
Expected ranges
Rand / Usd	7.2000-7.4000
Rand / Euro	10.9500-11.1500
Rand / Sterling	12.0000-12.2000
Jpy / Rand	11.80-12.00
Article courtesy of Accredinet

GDP outperforms Expectations

RDG Brokers — Wed, 25 Nov 2009 07:20:01 +0000

South Africa’s rand rallied yesterday after the release of 3rd Quarter GDP figures. The GDP grew by 0.9 percent confirming that the local economy moved out of the recession. This figure was above market expectations as well as gold steaming ahead, both bullish factors for the local unit. We should remain in a 7.40/$ to 7.50/$ trading range today. Swift interest rate hikes aimed at containing inflation in product and asset prices could cause another downturn in the slowly recovering economies of the United States and Europe, the head of the World Bank said. “Waiting for bubbles to burst and then cleaning up the aftermath is now a new lesson of what not to do,” World Bank President Robert Zoellick said in an article published in Wednesday’s Financial Times. “But tightening interest rates too abruptly — especially where recoveries are weak, such as in the U.S. and Europe — could trigger another downturn.” Zoellick noted that Australia’s central bank had already raised interest rates, which may put Asian countries with close links to Australia’s economy under pressure to follow suit. “But raising rates while the Fed keeps its rates close to zero would cause Asian currencies to appreciate. This would make their exports more expensive and decrease overseas sales, hurting recoveries based on exports.” He said there was also competition from China: “The renminbi is tied to a declining U.S. dollar that makes Chinese goods cheaper to buy than those of Asian rivals.”
Current levels
Rand / Usd	7.4000-7.4500
Rand / Euro	11.1400-11.1900
Rand / Sterling	12.3300-12.3800
Jpy / Rand	11.85-11.90
Jpy / Usd	88.38
Usd / Euro	1.4988
Gbp / Usd	1.66618
Gold	$1 177.00
Expected ranges
Rand / Usd	7.3500-7.5500
Rand / Euro	11.1000-11.3000
Rand / Sterling	12.2000-12.4000
Jpy / Rand	11.80-12.00

South Africa out of Recession

RDG Brokers — Tue, 24 Nov 2009 15:43:59 +0000

South Africa’s rand continued to trade sideways with little interest shown by local traders. We have 3rd GDP figures released today which will give us an indication of the state of our local economy, economists expect 0.2 percent growth. Most major currencies are trading sideways which will probably contribute to another quiet day locally. We will see exporters close to 7.60/$ and importers will probably look to buy currency below 7.50/$. The dollar fell broadly on Monday after dovish comments from a U.S. Federal Reserve official added weight to expectations that U.S. monetary policy would stay ultra-loose for a prolonged period. The dollar fell to a six-week low against the yen and the euro gained more than three quarters of a percent against the greenback. Moves were exacerbated by thin liquidity with Tokyo markets shut and ahead of Thursday’s U.S. Thanksgiving holiday. St. Louis Federal Reserve President James Bullard said on Sunday that the central bank should keep alive its mortgage-related asset purchase program beyond a planned end date to help stimulate the economy. Traders were also encouraged to sell dollars in favour of higher-yielding and perceived riskier currencies as gold prices jumped to record highs, European shares rose 1.4 percent and oil prices CLc1 gained more than 1 percent.
Current levels
Rand / Usd	7.5000-7.5500
Rand / Euro	11.2300-11.2800
Rand / Sterling	12.4500-12.5000
Jpy / Rand	11.75-11.80
Jpy / Usd	88.83
Usd / Euro	1.4930
Gbp / Usd	1.6562
Gold	$1 167.00
Brent	$79.40
Expected ranges
Rand / Usd	7.4000-7.6000
Rand / Euro	11.1500-11.3500
Rand / Sterling	12.4000-12.6000
Jpy / Rand	11.70-11.90

Exchange Control Relaxed

RDG Brokers — Wed, 28 Oct 2009 13:37:29 +0000

After yesterday’s action the release of CPI today should be a non event. Market expectations are at 6.2 percent slightly lower than last month. However the big mover yesterday was the budget speech. Even though the relaxation of exchange control measures we perceived as positive the huge projected budget deficit over the next few years had a negative impact on the rand. It is clear that department of finance also prefer a weaker rand. Taking all these negative factors in consideration the rand actually performed well to be at 7.67/$ this morning. Euro and gold dropped so a move toward 7.80/$ is possible. U.S. Treasury Secretary Timothy Geithner on Tuesday said the dollar would remain the world’s main reserve currency for a long time as the country takes the right measures to support the economy. “I think the dollar will remain the principal reserve currency for a long period of time,” Geithner said at a conference sponsored by the Securities Industry and Financial Markets Association in New York. However, he also said the dollar’s position is not a privilege and comes with responsibilities and obligations that the United States must uphold.
Current levels
Rand / Usd	7.6500-7.7000
Rand / Euro	11.3300-11.3800
Rand / Sterling	12.5300-12.5800
Jpy / Rand	11.90 -11.95
Jpy / Usd	91.33
Usd / Euro	1.4833
Gbp / Usd	1.6369
Gold	$1 040.00
Brent	$77.75
Expected ranges
Rand / Usd	7.5800-7.7800
Rand / Euro	11.2500-11.4500
Rand / Sterling	12.4500-12.6500
Jpy / Rand	11.80-12.00

Strong Rand??

RDG Brokers — Thu, 15 Oct 2009 09:03:40 +0000

The rand continued to steam ahead as the U.S. dollar falter on international currency markets. The euro is currently trading close to 1.50 to the dollar as investors are selling dollar assets. The local unit is currently trading in the lower 7.20/$ region, its strongest level in over a year after a brief visit here last month. Trading will remain uncertain, but we should see importer interest below 7.20/$. The interbank cost of borrowing dollars slipped on Wednesday after dovish comments from a Federal Reserve official reinforced expectations the U.S. central bank will maintain a loose monetary policy at least into next year. U.S. Federal Reserve Vice Chairman Donald Kohn made the case for a prolonged period of ultra-low interest rates late on Tuesday, saying the U.S. economy would not quickly snap back from its deep recession. Kohn’s comments followed remarks from Fed Chairman Ben Bernanke late last week, who said the central bank will need to tighten monetary policy as the economic recovery takes hold. Bernanke’s comments spurred a sharp selloff in the bond market and boosted the dollar on Friday as investors speculated the U.S. central bank could move to raise interest rates sooner than originally expected. Still, most U.S. primary dealers expect the Fed to hold off from raising the benchmark federal funds rate from its near-zero level until the second half of next year or later, according to a recent Reuters poll
Current levels
Rand / Usd	7.2200-7.2700
Rand / Euro	10.8000-10.8500
Rand / Sterling	11.6000-11.6500
Jpy / Rand	12.31 -12.36
Jpy / Usd	89.45
Usd / Euro	1.4959
Gbp / Usd	1.6065
Gold	$1 064.00
Brent	$74.65
Expected ranges
Rand / Usd	7.1800-7.3800
Rand / Euro	10.7500-10.9500
Rand / Sterling	11.5500-11.7500
Jpy / Rand	12.20-12.40

Recovery in sight for Global Market

RDG Brokers — Wed, 30 Sep 2009 08:49:50 +0000

South Africa’s rand continued to trade in a 7.35/$ to 7.45/$ trading range, with little interest shown by market players. Today is the due date for the MTN/Bharti announcement and the general expectation is that the announcement will be postponed once again. Most other currencies are also trading sideways. Locally we have the release of our trade figures market expectations is at -0.3 billion rand, unless this figure is way out of line it should be a non event. Manufacturing activity powered ahead in Japan and China in September, providing fresh evidence of a global recovery, but other data from Tokyo showed worrisome signs that the impact of massive government stimulus spending may be starting to fade. Japanese manufacturing grew at its fastest pace in three years, with expanding new orders at home and abroad, while factories in China cranked up production for the sixth straight month, private activity indexes showed. Elsewhere, stronger-than-expected retail sales in Australia added to market expectations that its central bank could start to raise interest rates as early as November as the economy regains momentum, while business confidence in New Zealand climbed to its strongest level in a decade. A purchasing managers’ index on China showed a 4 trillion Yuan ($585 billion) government stimulus programme and ultra-loose growth-supportive policy continued to bolster the domestic economy in September, while global demand for Asian goods slowly recovered
Current levels
Rand / Usd	7.3500-7.4000
Rand / Euro	10.8000-10.8500
Rand / Sterling	11.8500-11.9000
Jpy / Rand	12.12 -12.17
Jpy / Usd	89.80
Usd / Euro	1.4619
Gbp / Usd	1.6060
Gold	$997.00
Brent	$65.80
Expected ranges
Rand / Usd	7.33000-7.5300
Rand / Euro	10.8000-11.0000
Rand / Sterling	11.8000-12.0000
Jpy / Rand	12.00-12.20

Gold is Back

RDG Brokers — Tue, 22 Sep 2009 09:19:56 +0000

South Africa’s rand strengthened to back below the 7.50/$ mark after the euro and pound recovered overnight. Gold is back above the $ 1000.00 mark which is another positive. Most traders will be waiting for the MPC announcement this afternoon, the press conference is scheduled for 15h00. We have inflation data this morning, the general consensus is that inflation will continue to decline to 6.3 percent. Iran has replaced the U.S. dollar with the euro in calculating the value of its Oil Stabilization Fund (OSF), Iranian media reported on Monday. The decision was made earlier this month by President Mahmoud Ahmadinejad, based on a recommendation by the board of directors of the fund, the Poul business daily reported, without citing any official sources. State radio said the move was taken because the government wished to protect itself from the fragility of the U.S. economy and the weak dollar. The Central Bank of Iran, contacted by telephone, declined to comment. The OSF, which forms part of Iran’s foreign exchange reserves, is a contingency fund set aside by the government to cushion the economy against fluctuating international oil prices and help both the public and private sectors with their hard currency needs by extending loans.
Current levels
Rand / Usd	7.4300-7.4800
Rand / Euro	10.9600-11.0100
Rand / Sterling	12.1000-12.1500
Jpy / Rand	12.26-12.31
Jpy / Usd	91.57
Usd / Euro	1.4725
Gbp / Usd	1.6275
Gold	$1 007.50
Brent	$68.93
Expected ranges
Rand / Usd	7.4000-7.6000
Rand / Euro	10.9000-11.1000
Rand / Sterling	12.0500-12.2500
Jpy / Rand	12.20-12.40

Importer Demand

RDG Brokers — Wed, 16 Sep 2009 14:57:10 +0000

South Africa’s rand continued to rally, still on the back of the MTN/Bharti transaction. Last time we had a similar size transaction with ABSA and Barclays we bottomed out at 5.50/$ so it is difficult to call a bottom on the rand. We have seen good importer demand however the supply is still out there. Traders will start looking ahead to next week’s MPC meeting and while the rand is strong we could see another 50 basis point cut in local rates. Japan’s Yukio Hatoyama was voted in as prime minister by parliament’s lower house on Wednesday, ushering in an untested government to deal with a struggling economy and the deep-seated problems of a fast-ageing population. Hatoyama, whose Democratic Party of Japan (DPJ) trounced the long-ruling Liberal Democratic Party in an election last month, faces pressure to make good on campaign promises to focus spending on consumers, cut waste and reduce bureaucrat control over policy. Hatoyama, 62, wearing his lucky gold, silver and blue striped tie and signature pocket handkerchief, stood and bowed after the vote.

Current levels

Rand / Usd 7.3500-7.4000

Rand / Euro 10.8000-10.8500

Rand / Sterling 12.1000-12.1500

Jpy / Rand 12.25-12.30

Jpy / Usd 90.58

Usd / Euro 1.4615

Gbp / Usd 1.6475

Gold $1 015

Brent $69.73

Expected ranges

Rand / Usd 7.3000-7.5000

Rand / Euro 10.7000-10.9000

Rand / Sterling 12.0500-12.2500

Jpy / Rand 12.20-12.40

Rand too Strong??

RDG Brokers — Fri, 11 Sep 2009 07:57:38 +0000

South Africa’s rand weakened yesterday mainly due to profit taking and comments by outgoing Reserve Bank Governor Tito Mboweni and officials from that IMF that a strong rand is not ideal for the South African economy. The local unit weakened to trade above 7.60/$ but is currently slightly stronger at 7.57/$. As we know comments by official only has a short term effect on currencies if there is now physical intervention in the market. Analysts will continue to monitor the MTN/Bharti developments for further clues.

The dollar remained vulnerable on Friday near its lowest level this year against the euro as investors continued to favour other riskier and growth-linked currencies such as the Australian and New Zealand dollars. Improving economic data and company earnings added to growing investor confidence and kept the New Zealand dollar near its highest since late August last year and sterling close to a one-month peak hit on Thursday. The Australian dollar slightly lagged other higher-yielding currencies to rise after weaker-than-expected data on employment and retail sales this week cooled expectations for an interest rate hike as early as next month. But analysts said demand from Asian central banks diversifying their reserves out of the greenback kept providing strong support to the Aussie. Investors waited to see if a slew of Chinese data due on Friday morning will strengthen economic recovery hopes and encourage investors to buy more riskier assets and currencies by selling the low-yielding U.S. dollar.

Current levels

Rand / Usd
7.5500-7.6000

Rand / Euro
11.0000-11.0500

Rand / Sterling
12.6000-12.6500

Jpy / Rand
12.07-12.12

Jpy / Usd
91.40

Usd / Euro
1.4600

Gbp / Usd
1.66695

Gold
$1001.00

Brent
$70.43