Daily outlook for ZAR: Commerzbank

Quotes from Commerzbank Corporates & Markets:

-ZAR: The South African rand still has a number of stumbling blocks to overcome this week. First off, the South African GDP figures for Q4 are due for publication today which should exceed those of Q3 but clearly fall short compared to the year prior. The strikes in the mining and the manufacturing sector around the middle of last year have left their marks.

-Secondly, the Finance Minister, Nhlanhla Nene, will be holding his budget speech on Wednesday. The market will pay particular attention to details about the announced tax increases, to the deficit targets and to the measures aimed at budget consolidation as the risk of further rating downgrades - after two last year - is still lingering. Lastly, the trade balance- to be published on Friday - should turn negative again for January due to seasonal effects; the question is, how negative.

-All told, the rand is not only faced with the problem of a generally appreciating US dollar, but also with domestic factors that might be burdening the currency in the course of the week. While there is strong resistance at 11.75 in USD-ZAR, we cannot rule out a test of 11.80 in case of big disappointments.