RDG BROKERS » Markets

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

Investors cash In

RDG Brokers — Wed, 21 Oct 2009 16:24:55 +0000

We saw profit taking across the board as traders bought back short dollar positions on local and international currency markets. The rand gave back some of its gains versus the European currencies as well. Traders will close long rand positions ahead of the MPC rate announcement even though the general consensus is for rates to remain unchanged. Looking forward we have the mini budget coming up which could have an impact on the currency markets. The dollar stabilised on Wednesday, aided by profit-booking in rallying commodity-linked and higher-yielding currencies, after being pushed to a 14-month low against a basket of currencies the previous day. Traders said investors had been cashing in gains in the Canadian and New Zealand dollars, which hit their strongest levels in about 15 months this month, and in sterling, pushing them down about 0.2 percent against the greenback. The move helped the dollar climb further off a 14-month low against the euro after the single European currency failed to breach a psychological barrier at $1.50 the previous day. The dollar also got some support from profit-taking in Asian currencies, after markets in Brazil fell on a new government tax on foreign investments aimed at stopping the real from gaining. The Bank of Canada killed talk of an early rate hike on Tuesday, warning that favourable economic developments were being undermined by the Canadian dollar’s strength and sending the currency down sharply.
Current levels
Rand / Usd	7.3800-7.4300
Rand / Euro	11.0000-11.0500
Rand / Sterling	12.1000-12.1500
Jpy / Rand	12.20 -12.25
Jpy / Usd	90.68
Usd / Euro	1.4940
Gbp / Usd	1.6415
Gold	$1 056.00
Brent	$76.95
Expected ranges
Rand / Usd	7.3000-7.5000
Rand / Euro	10.9500-11.1500
Rand / Sterling	12.0000-12.2000
Jpy / Rand	12.15-12.35

Emerging Markets Boosted

RDG Brokers — Tue, 29 Sep 2009 10:08:30 +0000

South Africa’s rand remains well supported as stock markets rallied globally, giving emerging markets a boost. We had Reserve Bank asking for prices in the rand last week and currently we are heading to similar levels. It will be interesting to see whether they will intervene? The local unit also gained a lot versus the euro and pound and currently we are at levels seen two years ago on the cross currencies. The dollar rose against the yen on Tuesday as its rebound from eight-month low prompted investors to trim short positions and after Japan’s finance minister said intervention was possible in extreme cases. After backtracking on Monday from remarks suggesting he was comfortable with recent yen strength, Finance Minister Hirohisa Fujii spoke again, saying he would not rule out taking action if currency moves were irregular but that not promoting a weak currency was the correct policy. The yen, already on the back foot early after automatic dollar buy orders were triggered around 89.80 yen per dollar, weakened past 90.00 yen but later edged off its lows and analysts said his comments did not mean Japan’s forex policy had changed.
Current levels
Rand / Usd	7.3700-7.4200
Rand / Euro	10.8000-10.8500
Rand / Sterling	11.7200-11.7700
Jpy / Rand	12.12 -12.17
Jpy / Usd	89.80
Usd / Euro	1.4611
Gbp / Usd	1.5860
Gold	$991.00
Brent	$65.69
Expected ranges
Rand / Usd	7.33000-7.5300
Rand / Euro	10.7500-10.9500
Rand / Sterling	11.7000-11.9000
Jpy / Rand	12.00-12.20

Interest Rates Unchanged

RDG Brokers — Wed, 23 Sep 2009 08:35:00 +0000

South Africa’s rand continued to strengthen yesterday after the MPC left interest rates unchanged. Market players probably interpret this as a sign that local rates have bottomed out. Comments made by Reserve Bank Governor that the rand is too strong at current levels are ignored as markets need action and verbal intervention only lasts for a few days. Inflation was lower but still above the 3 to 6 percent target range which was probably the deciding factor not to cut rates. China is appealing a World Trade Organisation ruling against its restrictions on imported films, books and other audio visual materials, adding to sparring following the United States’ imposition of safeguard tariffs on Chinese-made tyres earlier this month. With the two giant economies joined at the hip, the U.S.-China relationship is unlikely to unravel over any single product. Just a quarter century ago, “Made in China” products accounted for less than 1 percent of U.S. imports. Now, China’s high rate of savings is used to buy U.S. Treasuries, allowing Americans to keep buying Chinese-made exports. That in turn has driven tremendous economic growth in China and lifted hundreds of millions of Chinese out of poverty. China is now the largest holder of U.S. government debt, while the United States is China’s second-biggest trade partner. The intimate relationship between the two economies has marched in step with China’s opening up to the outside world over the last three decades. TRADE By 2008, U.S. exports to China totalled $69.7 billion, but were dwarfed by $337.8 billion in exports from China to the United States. The U.S. trade deficit with China has steadily grown since 1985, when its exports to China were worth $3.86 billion, just $6 million less than the value of Chinese shipments to the United States. Bilateral trade was less than $2.5 billion in 1979.
Current levels
Rand / Usd	7.3500-7.4000
Rand / Euro	10.9100-10.9600
Rand / Sterling	12.0700-12.1200
Jpy / Rand	12.26-12.31
Jpy / Usd	90.85
Usd / Euro	1.4800
Gbp / Usd	1.6375
Gold	$1 014.00
Brent	$70.15
Expected ranges
Rand / Usd	7.3300-7.5300
Rand / Euro	10.8500-11.0500
Rand / Sterling	12.0500-12.2500
Jpy / Rand	12.20-12.40

Rand Dips over Budget Expectations

RDG Brokers — Wed, 02 Sep 2009 14:40:36 +0000

We remain fairly quiet, however the rand weakened overnight after minister of finance Gordhan warned that the budget deficit could be much larger than expected. We are in the mid 7.80 and do not expect too much action. In the bigger picture we are in the 7.70/$ to 8.30/$ trading range, which is good news for both importers and exporters as stability is all that is required to manage currency risk.

Dollar interbank rates fell to record lows in Singapore on Wednesday in spite of a slight pick-up in interest rate volatilities and wider spreads as fresh fear over bank failures caused financial stocks to fall. Private equity and hedge fund Cerberus Capital Management, which has been hit hard by investment losses, on Tuesday dismissed rumours it is in danger of default. But trading in Asia continued to be dogged by fears that a major bank or a hedge fund would fail, a factor that has played a part in driving U.S. stock markets down three days in a row.

Current levels

Rand / Usd
7. 7.8500-7.9000 -7.7700

Rand / Euro
11.1800-11.2300

Rand / Sterling
12.6800-12.7300

Jpy / Rand
11.75-11.80

Jpy / Usd
92.80

Usd / Euro
1.4215

Gbp / Usd
1.6130

Gold
$955.00

Brent
$68.02

Expected ranges

Rand / Usd
7.7500-7.9500

Rand / Euro
11.1000-11.3000

Rand / Sterling
12.6500-12.8500

Jpy / Rand
11.65-11.85

Rand Steady for Now

RDG Brokers — Tue, 04 Aug 2009 11:54:14 +0000

South Africa’s rand remained in a 7.75/$ to 7.85/$ trading range after MTN announced that their talks has been extended to the end of August. The local unit weakened against the most European currencies as the dollar dropped against most major currencies. Speculators selling dollars against the rand, anticipating a big inflow from the MTN/Bharti transaction are probably buying back short positions as nothing concrete materialize as yet. Talks of Bidvest is looking to acquire R2.8 billion worth of an Eastern European food service company as it expands into offshore markets will not impact the rand too much as the MTN/Bharti transaction is expected to be much larger.

The dollar stayed near its lowest level this year against a basket of currencies on Tuesday, as bullish global stock markets and upbeat economic data lifted investor risk appetite, denting the greenback’s appeal. The Australian dollar hit a 10-month high against the dollar and the yen ahead of the Reserve Bank of Australia’s interest rate decision later on Tuesday, when some market participants suspect it may abandon its easing stance. The New Zealand dollar and sterling also hit multi-month highs against the dollar, with the euro holding firm, after positive manufacturing reports from the U.S., Europe and China on Monday boosted hopes for the global economy, dealers said. Tokyo’s Nikkei share average5 hit its highest in 10 months on Tuesday after U.S. stocks rallied the previous day, pushing the benchmark S&P 500 Index above 1,000 for the first time in nine months.

Current levels
Rand / Usd
7.7800-7.8300
Rand / Euro
11.2300-11.2800
Rand / Sterling
13.2000-13.2500
Jpy / Rand
12.15-12.20
Jpy / Usd
94.96
Usd / Euro
1.4396
Gbp / Usd
1.6933
Gold
$953.00
Brent
$73.14
Expected ranges
Rand / Usd
7.7000-7.9000
Rand / Euro
11.1500-11.3500
Rand / Sterling
13.1000-13.3000
Jpy / Rand
12.10-12.30

Markets Recover

RDG Brokers — Wed, 15 Jul 2009 13:50:23 +0000

South Africa’s rand once again weakened overnight but failed to break above
8.30/$ after stock markets turned positive later in the overnight session of
trading. The local unit is back below 8.20/$ this morning due to a stronger
euro on international currency markets. The long term outlook for the euro
remains bullish, which could support the rand later in the year.

The Bank of Japan voted on Wednesday to extend its emergency corporate
funding support measures to avoid choking off a fragile economic recovery.
The move contrasted with China, where the central bank acted to gently pull
back on the reins of the economy as foreign exchange reserves topped $2
trillion — a sign of money flowing back into the country in anticipation of
an improving economy. Strong earnings from Intel Corp and Goldman Sachs
lifted stock markets on hopes of a rebound in corporate profits, despite
signs Western economies are not yet on a firm path to recovery from the
deepest recession in decades.

Current levels

Rand / Usd
8.1500-8.2000
Rand / Euro
11.4800 – 11.5300
Rand / Sterling
13.4000 – 13.4500
Jpy / Rand
11.35- 11.40
Jpy / Usd
93.40
Usd / Euro
1.4055
Gbp / Usd
1.6388
Gold
$928.00
Brent
$61.70

Expected ranges

Rand / Usd
8.0500-8.2500
Rand / Euro
11.4000-11.6000
Rand / Sterling
13.3500-13.5500
Jpy / Rand
11.25-11.45

Article: courtesy of Accredinet Financial Solutions

China Tackles Currency System

RDG Brokers — Fri, 10 Jul 2009 14:17:57 +0000

South Africa’s rand traded in an 8.10/$ to 8.20/$ trading range yesterday. Markets remain uncertain and it appears that the rand will continue to be under pressure. Traders are seeing the 8.20/$ as a major resistance and if breached stop loss orders could be triggered causing further weakness. China called on Thursday for reform of the reserve currency system at a meeting of world leaders in one of its most direct attacks on the dollar’s global dominance. Chinese State Councillor Dai Bingguo did not specifically name the dollar at talks between the Group of Eight rich nations and G5 emerging powers, but he was unequivocal in calling for the world to diversify the reserve currency system and aim at relatively stable exchange rates. France also unexpectedly called for a currency discussion and moving toward a “multimonetary” system, though Britain warned any debate should be reserved for the long term to avoid destabilizing markets in the midst of a global recession. China’s ideas for changing the system had previously been mentioned in reports by its central bank, but had never been voiced in a speech by such a high-ranking political leader. Current levels Rand / Usd 8.1500-8.2000 Rand / Euro 11.3500 – 11.4000 Rand / Sterling 13.2700 – 13.3200 Jpy / Rand 11.30- 11.35 Jpy / Usd 92.57 Usd / Euro 1.3917 Gbp / Usd 1.6258 Gold $912.00 Brent $60.48 Expected ranges Rand / Usd 8.1000-8.3000 Rand / Euro 11.3000-11.5000 Rand / Sterling 13.2000-13.4000 Jpy / Rand 11.20-11.40