Euro Struggles on Increased Recession Risk; Rand Outlook Worsens After Central Bank Changes Tune on Interest Rates
The euro is under siege following disappointing data and news this week that Germany barely escaped a recession in 2018. The ECB will now wait longer before raising interest rates, analysts say; however, EUR/USD will still end the year higher. In South Africa, a prediction by the country’s central bank that interest rates will be raised only once before 2021 put an end to the rand’s great start to the year.
Canadian Dollar Gets Interest Rate Boost; Rand Dips on Budget Disappointment
The Canadian dollar received a significant boost on Wednesday after the Bank of Canada said it would “need to raise [interest rates] to a neutral stance to achieve the inflation target.” As widely expected, the BoC also hiked its benchmark rate by 25 basis points to 1.75 percent. The Canadian dollar strengthened by nearly a […]
End of “Accommodative” Monetary Policy Sparks US Dollar Volatility
The Federal Reserve raised the upper level of US interest rates to 2.25 percent on Wednesday, as widely expected, while also dropping longstanding terminology from its statement relating to the “accommodative” level of monetary policy. The dollar was volatile as a result.
Relief in Emerging Market FX After Turkey Raises Interest Rates
There was widespread relief among emerging market investors on Thursday after the Turkish central bank finally raised interest rates to protect the embattled lira. Elsewhere, the dollar lost value for a fourth consecutive day and ethereum stabilized after a ten-day fall.
Rand Misery Piled On as South Africa Enters Recession
The rand fell sharply on Tuesday following news that South Africa has entered a recession. The dollar, meanwhile, continues to react favourably whenever the spotlight is turned towards US tariffs and a potential trade conflict with China.
Dollar and Yen Soar on Flight to Safety; Turkey Leads Turmoil in EM FX
The US dollar and Japanese yen soared on Friday as traders fled risk-sensitive currencies. Turmoil in emerging market FX is being led by the Turkish lira, which fell 15 percent in twelve hours after President Trump doubled tariffs on Turkish steel and aluminium imports.
Rand at Six-Month Low but Predicted Higher by Year-End
The South African rand has so far been unable to escape the clutches of a broader emerging markets sell-off that shows no signs of letting up. The rand slid on Wednesday morning to six-month lows against eight of the FX G10 (the exceptions being the yen and Swiss franc) and has now suffered a double-digit […]
Ruble and Rand Best Performers During Busy Week for Emerging Market FX
It was a busy week for financial markets; one in which central banks disappointed, entire countries were in crisis, new leaders were elected, commodities thrived and Trump reimposed sanctions on Iran. With that said, emerging market currencies were erratic last week, and generally lost value, none more so than the Argentine peso which fell on […]
Canadian Dollar, Australian Dollar at 10-Week Highs on Commodities Strength; Rand and Ringgit Impress
The Canadian dollar climbed on Friday to its highest level in ten weeks on the back of an impressive end-of-year rally in the prices of oil, copper and gold. Other commodities-sensitive currencies like the Australian dollar, South African rand and Malaysian ringgit, among others, were also well supported. As WTI crude oil reached a two-and-a-half-year […]
Rand Continues Recovery Following Shocking Mid-Term Budget
The South African rand continued its recovery on Tuesday, strengthening to levels close to 14.0 per dollar, following last week’s budget-induced tumble. USD/ZAR had climbed as high as 14.35 on Friday – the rand’s weakest level against the dollar in eleven months – as investors dumped South African assets in response to last week’s mid-term […]
A Weak Rand Won’t Be Helped by Further Rate Cuts; Rand Volatility to Climb
The South African rand is suffering. The rand’s marginal gains on Wednesday against the FX majors did little to mask what has been a horrible month for the currency. Since September 6th, the rand has weakened by 7.6%, 6.3%, 5.0% and 4.2% against the pound (R.18.0), US dollar (R.13.6), euro (R.16.0) and Australian dollar (R.10.65) […]
CAD, AUD, NOK, BRL End the Week Strong After Oil Jumps on Further Bullish News
A near-$2 rise in the price of oil supported the so-called ‘commodities currencies’ on Friday, many of which gained close to a percent against the US dollar and made respectable gains against the euro and Japanese yen. Oil’s 3.9% rise to $48.74 per barrel (NYMEX crude futures, September delivery) followed news that US and Canadian […]
RBA Stay Put and Moody’s Are Unhappy with South Africa’s Monetary Policy, Rand Falls to Long-Term Lows
The South African Reserve Bank (SARB) surprised markets in July when it cut interest rates by a quarter-point to 6.75% – the country’s first rate cut since 2012. Prior to the decision, of the fifty economists polled by Reuters and Bloomberg, only three had predicted a move to lower the cost of borrowing. This rate […]
South African Rand Outlook: ZAR Makes Back Losses Following Surprise Rate Cut but Is Predicted to Fall in Coming Months
Early on Monday morning, South Africa’s rand is holding on to Friday’s gains, with USD/ZAR remaining calmly within the low 12.9s. The rand surprised many investors on Friday when it outperformed other emerging market currencies and made back all losses post-Thursday’s surprise rate cut by the South African Reserve Bank (SARB). The central bank lowered […]
South Africa’s Rating Downgraded Again but Currency Remains Stable
On Friday, US ratings agency Moody’s downgraded the sovereign credit rating of South Africa to Baa3 from Baa2 and assigned the country a negative outlook. The rating change concludes a review of South Africa by the agency which began on April 3rd. A Baa3 rating keeps South Africa at “investment grade” with Moody’s, one notch […]
Rand Tumbles Intra-Day Despite President Zuma Surviving Bid to Oust Him
On Monday, the South African rand opened sharply higher against the dollar upon Sunday’s late news that several members of the African National Congress party’s top leadership had failed in a bid to remove their party leader and South African president Jacob Zuma. ZAR/USD gapped up to 0.0787 at the open, up 1.2% on Friday’s […]
Gradual Appreciation of Taiwan Dollar Likely, Says Research Group, and Stormy Waters Possibly Ahead for Emerging Market Currencies
The team at BMI Research – part of the Fitch group of companies – are maintaining their “slightly bullish” short-term view on the Taiwan dollar, mainly on technical grounds. Over a longer-term, analysts at the firm are also positive on the Taiwanese currency, believing in a “gradual appreciation”, based upon a solid fiscal outlook in […]
South African Rand Stable Three-Weeks After Political Reshuffle
On April 3rd, ratings agency Standard & Poor’s downgraded South Africa’s sovereign credit rating to “junk” status (to BB+ from BBB-) following a chaotic and unwelcome cabinet reshuffle in the country during the final days of March. As reported earlier in April on BestExchangeRates.com, South African president Jacob Zuma had sacked his well-respected finance minister, […]
Is an Australian Dollar Reversal on the Cards?
The Australian dollar has had a tough couple of weeks. Yesterday, against the U.S. dollar the Aussie finished the FX session down for the third consecutive day (its eighth daily fall in the past ten trading days). As of writing, AUD/USD is down again in Tuesday’s Asian session, trading at 0.7591, marking a 2% fall […]