USD Soars, ZAR Plunges as South Africa Enters Recession - US Market Open
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MARKET DEVELOPMENT – ZAR SLIDES AS SOUTH AFRICA ENTER RECESSION
USD: As US market participants return from their elongated break, the USD is bid. The greenback back above 95.50, which in turn has seen its major counterparts on the backfoot. The Euro has shed 0.5% to move towards support at 1.1550, a break below will bring the psychological 1.15 level into focus.
ZAR: The South African is the worst performing emerging market currency today after the latest GDP statistics has shown that South Africa slipped into a recession for the first time since 2009. Market participants had been looking for a bounce back in today’s GDP report, however, the quarterly rate showed a contraction of 0.7% after a fall of 2.6% in Q1. USDZAR hit highs of 15.25 with room for further upside given the fragile sentiment surrounding the EM complex, most notably, Turkey.
GBP: Another weak PMI, this time from the Construction sector added to the selling pressure for GBP with the spot rate pushing towards 1.28. Slight reprieve in the Pound as BoE Governor Carney signalled his willingness to stay on as Governor in order to help provide a smoothe Brexit.
DailyFX Economic Calendar: Tuesday, September 4, 2018 – North American Releases
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Five Things Traders are Reading
- “US Dollar Rallyin to Start September as August’s Concerns Carry Over” by Christopher Vecchio, CFA, Sr. Currency Strategist
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--- Written by Justin McQueen, Market Analyst
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