March 19th, 2008

China tightened monetary conditions by raising reserve requirements to 15.5% up frm 15%

USDTHB heading lower mainly on exporter sales, look for 31.00
SGD: break of 1.3738 low should extend to 1.3695, above 1.3880 look for 1.3925

ZAR
- fell against USD on speculation importers are selling the ccy; any sign of ZAR strength will be met by importer buying as fundamentals are still ZAR negative
- c/a deficit narrowed from 25yr high of 8.1% in 3rd qtr to 7.5% of GDP
- retail sales up 0.2% in Jan, first gain in 3 months; prior to November number had been positive every month since Feb 2001
- SARB raised rates 0.5% to 11% on 06Dec to fight 8.8% January inflation (outside 3-6% comfort zone for 10th straight month)
- Mboweni comments that weaker ZAR will prolong inflationary period; ZAR depreciation is reflective of c/a deficit but strong commodity prices and rates should prevent further depreciation; c/a deficit is 'comfortably financed by inflows'; Eskom situation is caused by cheap energy caused