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.

Free Trading Guides
EUR/USD
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
GBP/USD
Bullish
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
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
Oil - US Crude
Bullish
Bitcoin
Bearish
More View more
Real Time News
  • Get your stock market basics right - what is the stock market and how does stock trading work? Find out here: https://t.co/JfAJLAtlsY https://t.co/RtXgYG7ugU
  • The Indian Rupee 2020 outlook is bearish as India faces stagflation risk amid rising onion and crude oil prices. $USDINR may rise in the medium-term as the RBI defers hiking rates. Get your market update from @ddubrovskyFX here: https://t.co/lRrlZjjfLY https://t.co/5qrDGEfnoj
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.34%, while traders in Wall Street are at opposite extremes with 76.43%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/kPy1RxIqck
  • Commodities Update: As of 08:00, these are your best and worst performers based on the London trading schedule: Silver: -0.02% Gold: -0.24% Oil - US Crude: -0.53% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/TpWB5jdDgq
  • This is one of two pivotal data points ahead of the RBA rate decision. As it stands, markets are 42% priced in for a possible 25bps cut Don't miss this!!! https://t.co/4ikOiLOCDl
  • Forex Update: As of 08:00, these are your best and worst performers based on the London trading schedule: 🇪🇺EUR: -0.03% 🇬🇧GBP: -0.05% 🇨🇦CAD: -0.06% 🇦🇺AUD: -0.11% 🇳🇿NZD: -0.16% 🇨🇭CHF: -0.26% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/9Ul6ge8ogb
  • SA40 Cash Index - first pullback after breakout looks complete. Initial target = 52900 ..... Close < 51230 = fail #Alsi https://t.co/MP54yReHZe
  • What are the truths and myths of #forex trading? Find out from @DailyFX analysts here: https://t.co/uF75VPzstr https://t.co/hduCMophNH
  • Indices Update: As of 08:00, these are your best and worst performers based on the London trading schedule: Wall Street: 0.39% Germany 30: 0.38% US 500: 0.38% France 40: 0.21% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/e1QLmHGZJe
  • European Opening Calls From IG: #FTSE 7631 +0.26% #DAX 13624 +0.50% #CAC 6070 +0.40% #AEX 614 +0.31% #MIB 23993 +0.62% #IBEX 9639 +0.29% #STOXX 3803 +0.37%
USDZAR: South Africa Credit Rating Cut by Fitch, Rand Drops

USDZAR: South Africa Credit Rating Cut by Fitch, Rand Drops

2019-07-26 16:00:00
Rich Dvorak, Junior Analyst
Share:

USDZAR CLIMBS AS FITCH CUTS SOUTH AFRICA CREDIT RATING

  • USDZAR extends weekly gains as South African Rand weakness exacerbates recent move to the upside
  • South Africa credit cut to junk status with negative outlook by Fitch Ratings
  • South African downgrade primarily attributable to widening budget deficits and slower GDP growth

The South African Rand (ZAR) is coming under renewed pressure during Friday’s trading session following news that Fitch Ratings cut South Africa’s credit rating to BB+ with negative outlook for the country. So far today, spot USDZAR is benefiting the most in response with the currency pair eclipsing the 14.200 handle and now trading at its highest level since June 26. Spot EURZAR and spot GBPZAR are also pushing higher to the tune of 1.01% and 0.67% respectively.

USDZAR SPOT PRICE CHART: 4-HOUR TIME FRAME (JUNE 14, 2019 TO JULY 26, 2019)

Spot USDZAR Price Chart Reaction to Fitch Credit Downgrade July 2019

It is worth mentioning that the recent jump in spot USDZAR began prior to Fitch Ratings releasing its South Africa credit downgrade. The South African Rand began to come under pressure earlier in the week following the IMF World Economic Outlook showing a 0.5% cut to its 2019 GDP growth forecast and a 0.4% reduction to its 2020 GDP growth estimate.

The Fitch Ratings’ South Africa credit downgrade reflected “a marked widening in the budget deficit as a result of lower GDP growth and increased spending” which raised estimates for the country’s debt-to-GDP ratio. Concerns over the finances of state-owned electric company Eskom also contributed to the negative outlook.

While this could be chalked up to a “buy the rumor, sell the news” event, there could be another South Africa credit downgrade coming down the pipeline from Moody’s who currently lists the country at Baa3, the lowest rating for investment-grade status, with neutral outlook. Another credit downgrade would likely exacerbate weakness in the South African Rand which could keep USDZAR bid – even with a Fed rate cut expected next week.

FOREX TRADING RESOURCES

  • Download our US Dollar Forecast for comprehensive fundamental and technical outlook
  • New to trading or simply looking to brush up on the basics of forex? Download this free educational guide on Forex Trading for Beginners
  • Find out how IG Client Sentiment can be used to identify the bullish and bearish biases of forex traders and reveal potential forex trading opportunities

- Written by Rich Dvorak, Junior Analyst for DailyFX

- Follow @RichDvorakFX on Twitter

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

DISCLOSURES

News & Analysis at your fingertips.