Thursday June 25, 2009 - 12:50:20 GMT
Share This Story
Black Swan Capital - www.blackswantrading.com
An Opportunity in Dollar/Rand?
â€˘ Standard Life Buys Brazilian Real, Aussie, Sells Euro in Commodities Bet (Bloomberg)
â€˘ China's Central Bank Pledges to Keep the Money Flowing as Economy Recovers (Bloomberg
Key Reports Due (WSJ):
7:45 a.m. ICSC Chain Store Sales Index For June 20: Previous: -0.6%.
8:55 a.m. Redbook Retail Sales Index For June 20: Previous: -4.5%.
10:00 a.m. May Existing Home Sales: Expected: +2.6%. Previous: +2.9%.
10:00 a.m. June Richmond Fed Manufacturing Index: Previous: 4.
4:30 p.m. June 1 API Oil Industry Report
5:00 p.m. ABC/Wash Post Consumer Conf For June 20: Previous: -49.
â€śSuccess usually comes to those who are too busy to be looking for it.â€ť
Henry David Thoreau
FX Trading â€“ An Opportunity in Dollar/Rand?
Wondering why the South African rand rallied sharply against the buck yesterday? Me too.
Leading into and following the Federal Reserve announcement yesterday, the dollar was stronger versus the pack of majors. So what prompted such strength from the rand?
Scan the recent headlines and find they point toward ongoing weakness for Africaâ€™s largest economy. To be sure, nothing fundamental was the driver behind the randâ€™s move yesterday.
Perhaps inter-market correlations can tell the story ...
(Charts unavailable in text format.)
Above is a chart of the USD vs. the South African rand. Below that is a chart of gold.
Even on a day when the US dollar index was decisively stronger, gold made an equally strong move and so did the South African rand. South Africa has a very extensive mining complex and its gold sector is important to the countryâ€™s export revenue.
Perhaps this is the simple reason for the randâ€™s peculiar strength yesterday.
Commodities are a bit stronger to start the morning. But gold did finish well off its highs yesterday, unlike the rand. And with the South African economic data applying pressure, the rand is lower today despite early gold strength. Most recently, South African PPI plunged the most on record, softening the potential for inflation and increasing the potential for lower rates
If gold fails to conquer yesterdayâ€™s intraday high then it could apply even greater pressure on the rand. Keep in mind, too, the buck is stronger again today. Right now it would seem the buck holds the advantage to the rand.
Perhaps a golden buying opportunity in USDZAR???
John Ross Crooks, III
Black Swan Capital LLC
Forex Trading News
Daily Forex Market News
Forex news reports can be found on the forex research
headlines page below. Here you will find real-time forex market news reports
provided by respected contributors of currency trading information. Daily forex
market news, weekly forex research and monthly forex news features can be found
Real-time forex market news reports and features providing
other currency trading information can be accessed by clicking on any of the
headlines below. At the top of the forex blog page you will find the latest
forex trading information. Scroll down the page if you are looking for less
recent currency trading information. Scroll to the bottom of fx blog headlines
and click on the link for past reports on forex. Currency world news reports
from previous years can be found on the left sidebar under "FX Archives."