Hey guys,
What is happening with rand? Check out the sudden depreciation against the USD past couple of days. It is at its highest level in an year.
x-rates.com/d/ZAR/USD/graph120.html
I am holding a lot of rand. What are your thoughts going into the future? Is it expected to depreciate further. Is it time for me to sell rand or hold on to it. What do you think?
Sam
I could be wrong but, with the big risk aversion sentiment going on, it is generally believed that the US dollar bulls are going to trample any other currencies until we see the end of the tunnel of the debt crisis contagion.
Were you trading without a stoploss? Seem like have moved too much for a SL to not be triggered
I am invested into a currency fund CD via everbank that does not stop loss. This is bad news for me. Hopefully I can stay afloat till the end of my CD term (expiring October this year).
Markets are likely to see another correction I would be getting rid of any FX bar USD and JPY for the near future.
Hi,
Please note that the following information is by no means a recommendation to buy or sell the ZAR i.e. I’m merely passing on some info that I heard locally (South Africa) about a week or two ago!!!
There is local ‘talk’ that at some point the government will attempt to peg the value of the ZAR to the USD at 10.5 ZAR to the USD. Whether or not this will ever happen remains to be seen. It’s not a popular idea with local economists (analysts) however i.e. the feeling is that the Zimbabwe Dollar was pegged to the USD at one stage and look at what the outcome of that was!!!
Also: local economists (analysts) feel that the ZAR will remain weak for an extended period of time. Remember also that (most of the time anyway) the value of the ZAR is highly correlated with the Gold price so you need to watch Gold too. In other words: should the price of Gold correct while the ZAR is at it’s present level against the USD then it (the ZAR) will weaken further. Lastly: the fact that the ZAR is at it WEAKEST level against the ZAR in a year means nothing in my opinion i.e. in March 2009 (only two months prior to a year ago) the ZAR was trading at around 10.67 ZAR to the USD (and a month or two prior to THAT it was as weak at 11 something to the USD although not for an extended period of time).
All of the above being said there is an old joke in this business: if you have ten economists (analysts) in a room you’ll get fourteen (or whatever) different opinions!!!
Let me also say this though: fundamental analysis is by NO means my area of expertise at all so, and as I said, don’t base any trading decisions on my input above.
What concerns ME however is this: what made you get into this trade (I’m assuming it’s a trade)??? What I’m saying is this: surely you have SOME type of system or the other that will tell you when to take profit (or realise a loss)??? If you don’t: you’re trading ‘blind’ in my opinion UNLESS you’re an economist (analyst) that knows far more than the rest of us.
Regards,
Dale.
maybe the ZAR will become stronger during the world cup?
Hello,
Well ‘MAYBE’ but the ‘spirit’ of my post really was this:
There should BE no ‘MAYBE’ is my point. I don’t understand how somebody could be in a trade without having a clearly defined strategy for taking profit or realising a loss BEFORE getting into a trade. Believe me when I say that I KNOW how important these things are i.e. I’ve incurred losses in my time that would make your eyes pop out of your head. Only since I realised that I DO NOT know better than everyone else and have clearly defined entry and exit points has my ‘trading life’ changed!!!
I’m not trying to upset anyone here or come across as being condescending but there is NO reason to lose money in this business if you JUST stick to some basic rules and it upsets me when I see somebody making the same mistakes as I have made in the past because people back then were telling me the same things as I’m telling you (well: the thread starter) now but I chose to ignore such advice and this ‘led to tears’ I can tell you.
Regards,
Dale.
OK: I just went to have a look at the ‘Everbank’ website. The thread starter is not a trader or is not trading. He has a CD or ‘Certificate Of Deposit’ (see Everbank’s website for an explanation) so I guess my posts don’t really apply to the thread starter’s query. That said: the thread starter should, in my opinion, trade his own money in my opinion (although to be honest I’ve no idea how a CD works)!!! LOL!!!
I think I’ve dispensed some good advice nevertheless.
Regards,
Dale.
HI Dale,
I am the thread starter. Thanks for the input. Yes, I took the everbank CD for a single reason - ZAR was offering the highest interest rate for the CD at 5% APY. When I took the CD last year, I expected the ZAR to stay range bound within specific levels. I did not expect the market to see such a big correction this year and did not foresee the crisis in Europe which further helps the dollar.
I am not a day trader but ofcourse, I will never a FX day trade involving ZAR vs the USD lol
Sam
Hi Sam,
As I said: I don’t understand what a CD is. Are you saying that you can ‘buy’ ZAR and earn interest on the amount of ZAR at 5%??? And then how does it work i.e. I assume that the CD has a fixed period and interest rate for this period??? Is this not a lot like a fixed deposit i.e. money invested for a certain period of time at a fixed interest rate for that period of time (except of course for the fact that you’re actually investing in an alternate currency)???
But hey: I trade USD/ZAR a lot (lately anyway). As a long term trader the spread doesn’t really bother me to tell you the truth (well: I’m assuming it’s because of the ridiculous spread that you say that you would not day trade USD/ZAR)??? You should check out USD/RUB (Russian Ruble) at 1500 pips spread!!! LOL!!!
Regards,
Dale.
yes ridiculous spread and overall risk, I would not be comfortable trading USD/ZAR. CD is a fixed term deposit promising a fixed rate over a time period on ZAR. I hope your theory about pegging ZAR against the USD at 10.xx does not hold true!