Forex - Emerging EMEA Weekly Outlook & Strategy for 11-15 Mar


 16:11 (GMT) 08 Mar

  [Economic Data]

Sample Premium Content

The weaker-than-expected U.S. employment report limits USD upside despite negative EUR sentiment. Steady trading in the 1.12s is expected for now for the EUR/USD.

Last week, most EMEA currencies suffered from concerns about global growth after the ECB cut its 2019-2020 GDP growth and 2019-2021 HICP inflation forecasts and data showed that China's exports and imports fell more than expected in February. The rand and the lira underperformed, with the former hurt by comments from President Cyril Ramaphosa, who said that the ruling ANC was determined to nationalize the Reserve Bank. In turn, the lira weakened after comments by several senior officials indicated that Turkey would proceed with the acquisition and deployment of the Russian S-400 missile system despite the threat of further U.S. sanctions, with President Tayyip Erdogan adding that Turkey might even acquire the S-500 system from Russia. We expect both currencies to continue to underperform in the coming week.

Emerging EMEA Weekly Outlook & Strategy for 11-15 Mar (0101-JQPD-C01)

In Poland, we think that the CPI release on Friday will reveal that headline inflation quickened to 1.4% y/y in February from a 25-month low of 0.9% y/y in January, driven by higher food and fuel prices with consumer prices probably rising by 0.2% m/m in February.

Emerging EMEA Weekly Outlook & Strategy for 11-15 Mar (0101-JSWJ-C01)

Even though we expect the February CPI inflation reading to exceed the consensus forecast of 1.2% y/y, we see the zloty suffering further from worries about global growth in the coming week with the EUR/PLN potentially breaching the 4.3048 resistance level.

Emerging EMEA Weekly Outlook & Strategy for 11-15 Mar (0101-JSWJ-C02)

In Russia, we expect the ruble to remain hurt by bigger FX purchases by the CBR and more substantial external debt repayments in the coming week, with the USD/RUB approaching the key 67.15 resistance level despite the beginning of the monthly tax payment period on Friday.

Emerging EMEA Weekly Outlook & Strategy for 11-15 Mar (0101-JSWJ-C03)

In South Africa, we think that the rand will stay fragile in the coming week due to the risk of power cuts as well as worries about the SARB's independence, with the USD/ZAR potentially breaking the key 14.68 resistance level.

Emerging EMEA Weekly Outlook & Strategy for 11-15 Mar (0101-JQPG-C01)

In Turkey, we expect data on Monday to show that GDP fell by 1.8% y/y in Q4 2018 after it grew by 1.6% y/y in Q3, driven by retail sales and industrial production as attested to by recent stats office data. We also think that data on Monday will reveal that the current account deficit nudged down in January from USD 1.44bn in December, reflecting the slightly narrower trade deficit as indicated by recent data.

Emerging EMEA Weekly Outlook & Strategy for 11-15 Mar (0101-JSWJ-C04)

Although we expect the Q4 2018 GDP to contract by less than the consensus forecast of 2.5% y/y, we see potential for the lira's further depreciation in the coming week because of the threat of worse relations with the U.S. and the risk of sanctions, with the USD/TRY possibly surpassing the key 5.50 resistance level.


CurrenciesCountriesMarket Bulletins

Latest Currency Analysis

Available to subscribers only
Order Now