USD/ZAR: Rand remains vulnerable to sentiment - BBH

Matías Salord FXStreet

The Rand is expected to remain vulnerable while economic growth in South Africa is likely to accelerate during 2018 according to analysts at Brown Brother Harriman.

Key Quotes:

“The improving South African economy will be hampered in 2018. Its GDP rose 1.5% y/y in Q4 2017, and is expected to accelerate at around 2.0% y/y in Q1 2018. But capital investment remains weak despite improved business sentiment following the change in South Africa’s president from Zuma to Ramaphosa.”

“South African inflation continues to ease as core CPI slowed to 4.1% y/y, which is the lowest level since December 2011. SARB remains vigilant and sees CPI rising 4.9% in 2018 and 5.4% in 2019. A strong rand and limited increase in the electricity tariff would stem inflation, while high oil prices and hiking VAT and the sugar tax would boost inflation pressures. The survey by the South African government indicates its inflation expectations in 2018 marginally declined to 5.7% from 5.8% in 2017, remaining close to the upper end of the target range.”

“The rand is expected to remain vulnerable to the prospect of a credit rating downgrade and possible risk-off sentiments generated by political developments.”

Author

Matías Salord

FXStreet

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

EUR/USD flirts with daily highs, retargets 1.1900

EUR/USD regains upside traction, returning to the 1.1880 zone and refocusing its attention to the key 1.1900 barrier. The pair’s slight gains comes against the backdrop of a humble decline in the US Dollar as investors continue to assess the latest US CPI readings and the potential Fed’s rate path.

GBP/USD remains well bid around 1.3650

GBP/USD maintains its upside momentum in place, hovering around daily highs near 1.3650 and setting aside part of the recent three-day drop. Cable’s improved sentiment comes on the back of the Greenback’s irresolute price action, while recent hawkish comments from the BoE’s Pill also collaborate with the uptick.

Gold clings to gains just above $5,000/oz

Gold is reclaiming part of the ground lost on Wednesday’s marked decline, as bargain-hunters keep piling up and lifting prices past the key $5,000 per troy ounce. The precious metal’s move higher is also underpinned by the slight pullback in the US Dollar and declining US Treasury yields across the curve.

Crypto Today: Bitcoin, Ethereum, XRP in choppy price action, weighed down by falling institutional interest

Bitcoin's upside remains largely constrained amid weak technicals and declining institutional interest. Ethereum trades sideways above $1,900 support with the upside capped below $2,000 amid ETF outflows.

Week ahead – Data blitz, Fed Minutes and RBNZ decision in the spotlight

US GDP and PCE inflation are main highlights, plus the Fed minutes. UK and Japan have busy calendars too with focus on CPI. Flash PMIs for February will also be doing the rounds. RBNZ meets, is unlikely to follow RBA’s hawkish path.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.