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USD Soars, ZAR Plunges as South Africa Enters Recession - US Market Open

USD Soars, ZAR Plunges as South Africa Enters Recession - US Market Open

Justin McQueen, Strategist

Check out the brand new DailyFX trading forecasts for Q3

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

USD Soars, ZAR Plunges as South Africa Enters Recession - US Market Open

DailyFX Webinar Calendar: Tuesday, September 4, 2018

USD Soars, ZAR Plunges as South Africa Enters Recession - US Market Open

IG Client Sentiment Index: GBPUSD Chart of the Day

USD Soars, ZAR Plunges as South Africa Enters Recession - US Market Open

Five Things Traders are Reading

  1. US Dollar Rallyin to Start September as August’s Concerns Carry Overby Christopher Vecchio, CFA, Sr. Currency Strategist
  2. EURUSD Under Pressure as US Dollar Soars Ahead of NFPs" by Nick Cawley, Market Analyst
  3. Gold Price Bounce Over? Technical Outlook for Crude Oil, DAX, and S&P 500by Paul Robinson, Market Analyst
  4. CoT Update for US Dollar, Euro, British Pound, Gold, and More” by Nick Cawley, Market Analyst
  5. Crude Oil Price Analysis: Crucial Resistance Breached, Return to $80?by Justin McQueen, Market Analyst

--- Written by Justin McQueen, Market Analyst

To contact Justin, email him at Justin.mcqueen@ig.com

Follow Justin on Twitter @JMcQueenFX

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

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