News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bearish
Oil - US Crude
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Wall Street
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Bearish
GBP/USD
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
USD/JPY
Bearish
More View more
Real Time News
  • Take a closer look visually at the most influential global importers and exporters here: https://t.co/G58J1dg6y3 https://t.co/fGi6YgqqQt
  • What suits your style of trading stocks or commodities? Find out what are the differences in these two markets here: https://t.co/BnA07cMV0s https://t.co/fdigOgkmio
  • A forex trader is strategic, disciplined and always switched on to the markets. Learn how to build an FX mindset here: https://t.co/tB3aAErd70 https://t.co/Ilqz8BWTk0
  • The final ‘full’ week of the year brings about the last wave of significant event risk from around the globe, including three central bank rate decisions (Fed, BOE, & BOJ). Get your market update from @CVecchioFX here:https://t.co/PhqxSPlngI https://t.co/XX57vSjQwV
  • Greed is a natural human emotion that affects individuals to varying degrees. Unfortunately, when viewed in the context of trading, greed has proven to be a hindrance more often than it has assisted traders. Learn how to control greed in trading here: https://t.co/kODPAfJE79 https://t.co/HOvzuOICQx
  • Ever wonder if there are other chart types that can be sued for technical analysis? HLOC charts are discussed in the following article as well as their pros and cons. Learn more here: https://t.co/qV3c7a4YR3 https://t.co/32hYzqhuZ9
  • The Australian Dollar sits on the crossroads of Treasury yields, the S&P 500 and US fiscal stimulus expectations. Will $AUDUSD gains slow? Chinese Q4 GDP and Australian jobs data are due. Get your market update from @ddubrovskyFX here: https://t.co/BsYmmWFYOH https://t.co/HhLqb2iVgk
  • #Gold prices have come under significant pressure to kick-off 2021. However, the formation of bullish technical patterns across multiple timeframes suggests that a rebound higher may be at hand. Get your market update from @DanielGMoss here: https://t.co/Dpf8N4Fh0T https://t.co/pnZpnM9yT5
  • The ISM manufacturing index plays an important role in forex trading, with ISM data influencing currency prices globally. Learn about the importance of the ISM manufacturing index here: https://t.co/Xr3xtoFpZy https://t.co/yCtLFemdNc
  • GBP underpinned as BoE downplays negative rates, alongside vaccine rollout. Get your market update from @JMcQueenFX here: https://t.co/n6V6uw0XV5 https://t.co/Toq2fxSdBE
South Africa: Repo Rate Static Until Extent of Oil Shock is Determined

South Africa: Repo Rate Static Until Extent of Oil Shock is Determined

2015-01-21 15:53:00
Walker England, Kara Dailey,

Talking Points:

  • Headline CPI falls 0.4 pp from 7.6% to 7.2% in December 2014
  • SARB to wait and see full effects of oil price shock and rand exchange rate before adjusting rates
  • USD/ZAR Range Trades

Effective from July of 2014, the South African Reserve Bank ‘s Repo rate stands at 5.75% and looks to remain static until the SARB can assess the full impact of oil’s price shock on the economy. Thus, as explained by Governor Lesetja Kganyago, December’s drop in the consumer price index may not necessitate an immediate move in the interest rate.

Reported at an annual rate, CPI fell from 5.8% in November of last year to 5.7% a month later in December. Component by component, the annual rate of inflation for food and non-alcoholic beverages fell by 0.4pp from 7.6% to 7.2%, housing and utilities decreased from 5.8% to 5.7%, and transportation declined by 1.7% due to a 69 cent/litre drop in the price of petrol. However, while headline CPI is on the decline 4Q inflation expectations see the weakened rand continuing in its role as a shock absorber.

After taking into account the views of analysts, trade unions, and business people, the average expectation for CPI in 2015 was lowered by 0.3pp to 5.8%. While lower, this figure still remains near the top of the target’s 3-6 percent band. As noted by Governor Kganyago, during an interview at the World Economic Forum, this placement should be taken under consideration when determining the appropriate repo rate. With headline inflation falling and expectations still raised, policy makers will likely take a wait and see approach, monitoring the interaction between oil prices and the rand exchange rate.

At present it is unclear whether oil will be sustained at $50, creating a natural disinflationary pressure, or whether an ECB QE (if implemented) will led to a rand appreciation as did the Fed’s QE.

USD/ZAR Daily Chart

dailyfx us dollar south african rand daily chart January 2015

Chart Created by Walker England Using MarketScope2.0

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES