Gut Feel for 5th June 2018 at 08h57
Rates
USD / ZAR:
12,505
EUR / ZAR:
14,5977
GBP / ZAR:
16,6446
ZAR / JPY:
8,6677
EUR / USD:
1,1662
GBP / USD:
1,3301
USD / JPY:
108,65
The trading session demand for dollars forced the ZAR through the previous highs of 12.7000, and went further to reach a high of 12.75, the move triggered stop loss executions, the limited levels of prevailing liquidity exaggerating the move higher. Thereafter the rand traded firmer for the rest of the session supported by a strengthening EUR/USD. ZAR appreciated as much as 40% off its weakest levels. In Italy currently, there has been a huge clear-out of long EUR-USD positions due to Italy’s politics becoming untenable, however just as they had turned very bearish yesterday, they appear to be far more bullish today. back to local developments, from a ZAR view it was it is encouraging to note the soft growth in the credit cycle, which implies that inflation will remain muted through the months ahead and that the ZAR will enjoy ongoing resilience. Trade figures this afternoon will be instructive in that they will likely be what we have seen in the money supply and credit extension figures which suggests that SA is living within its means. Talking to traders they still like long dollar positions. Trading range 12.30-12.80
Economic Data:
* SA PPI y/y
* SA Trade Balance
* US PCE Core y/y
* US Pending Home Sales y/y
* US Personal Income & Spending
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