South Africa Interest Rate January 27 2022

What does the data mean to the market?

Higher interest rates are great for the value of the currency. Therefore, higher interest rates will create a BUY on ZAR Pairs and vice versa.
We see deviations often. We have seen four deviations since November 2018, which is excellent from a bi-monthly report.

April 2020 - We had a surprise cut of 1.5%, it was unscheduled, and the market wasn't ready to react. We don't have a chart for this, as it's an infrequent scenario.

March 2020 - An excellent cut of -0.50 gave a 1600 pip move over 3 mins. Not on the chart the data arrives 9 mins late, so the chart time is 13.09
See charts here.
https://calendarapi.galaxysoftwareinc.com/l/aHR0cHM6Ly9jYWxlbmRhci5nYWxheHlzb2Z0d2FyZWluYy5jb20vIy9jYWxlbmRhcjtpPTE2NTI5O3Q9MjAyMC0wMy0xOTtyPU0x

Historic deviations and their outcome

January 21 2020 A surprise -0.5% cut to the rate, which gave a solid 700 pip move on USDZAR. Awesome move

It's worth noting that the delivery time of this data was 9 mins past the hour.

Check out the price action here:
https://calendarapi.galaxysoftwareinc.com/l/0/aHR0cHM6Ly9jYWxlbmRhci5nYWxheHlzb2Z0d2FyZWluYy5jb20vIy9jaGFydDtpPTA7dD0yMDIwLTAxLTIxJTIwMTM6MDowMC4wO3M9VVNEWkFSO3I9UzE

I will use forecasts of:

Interest Rate Decision 0.40

Today's trade plan

Today it's forecast to see an increase to the rate to 4.00% therefore if we see a higher than expected increase to 4.25% or more I will take a trade on UDSZAR.

I'm not looking to trade if we don't see an increase or the increase is as expected.

Tradable pairs

USDZAR

Hope this helps but please do your own analysis!!

Good luck!!

James Thatcher

Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Past performance is not indicative of future results. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.