South African Rand (ZAR)
Central Bank: South African Reserve Bank (SARB)
Current Interest Rate: http://www.reservebank.co.za/

Emerging Opportunity

Having been previously modeled on the Bank of England, the South African Reserve Bank stands as the monetary authority in South Africa. Taking on major responsibilities similar to those of the other major central banks, the SARB is also known as a creditor in certain situations, a clearing bank and a major custodian of gold. Above all else, the central bank is in charge of "the achievement and maintenance of price stability". These responsibilities also include intervention in the foreign exchange markets when the situation arises.

Although it may seem counter-intuitive, the South African Reserve Bank remains a wholly owned private entity with hundreds of shareholders that are limited to owning less than 10,000 of the total 2,000,000 outstanding shares. Such regulations are to ensure that the interests of the economy precede those of any private individual. The monetary policy committee, comprised of the governor, three deputy governors and four senior officials of the Bank. The group meets based on a schedule that is finalized before the beginning of each year and they may choose to convene unscheduled meetings based on economic developments.

Viewed among traders as relatively volatile, the average daily range of the South African rand (ZAR) can be substantially higher than other currencies. However, when translated into dollar pips, the movements are almost equivalent to an average day in the British pound, making the currency a great pair to trade against the U.S. dollar (especially when taking into consideration the carry potential). Traders also trade the rand for its close relationship to gold and platinum. South Africa is a world leader when it comes to exports of both metals, so the correlation is similar to that between the Canadian dollar and crude oil. As a result, forex traders should consider the commodities markets in creating positions when economic data is limited. (Read more about the rand in The New World Of Emerging Market Currencies.)

Conclusion

Experienced forex traders know that in order to be successful in forex you must first know the factors that move individual currencies. We've taken a look at the governing bodies and socio-economic factors that move the nine most widely traded currencies in forex and hopefully you've got a better feel for why these currencies behave the way they do. If you're still looking for more information, don't worry, we will be delving even further into a few of the major economic factors that affect currencies. (For more introductory reading on the forex market, check out Getting Started In Forex and Forex Basics: Setting Up An Account.)

The Employment Situation Report

Related Articles
  1. Trading

    Top 8 Most Tradable Currencies

    Currencies can provide diversification for a portfolio that's in a rut. Find out which ones you need to know.
  2. Investing

    Profitable And Easy Ways To Invest In Africa

    Africa may hold the key to long-term portfolio success.
  3. Investing

    The 3 Reasons Why Chinese Invest in Africa

    Learn about the increasing level of foreign direct investment by China in Africa, and understand the major reasons for China's African investments.
  4. Investing

    South Africa ETF Vulnerable Amid Political Volatility

    The South Africa ETF could see more downside amid a shakeup in the country's finance ministry.
  5. Trading

    The Forex Market: Who Trades Currency And Why

    The forex market has a lot of unique attributes that may come as a surprise for new traders.
  6. Investing

    Currency Positions You Can Take Now

    The foreign currency market is the largest financial market in the world, and investors in this market have many options.
  7. Trading

    Forex Trading: A Beginner's Guide

    Learn about the forex market and some beginner trading strategies to get started.
  8. Trading

    Economic Factors That Affect The Forex Market

    Knowing the factors and indicators to watch will help you keep pace in the competitive and fast-moving world of forex.
  9. Trading

    Why It's Important To Regulate Foreign Exchange

    In an increasingly globalized economy, the significance of the foreign exchange marketplace cannot be underestimated.
  10. Trading

    How Equities Affect The FX Market

    We look at how you can predict a currency movement by studying the stock market.
Frequently Asked Questions
  1. Why Do Most of My Mortgage Payments Start Out as Interest?

    Fear not: Over the life of the mortgage, the portions of interest to principal will change.
  2. What is the difference between secured and unsecured debts?

    The differences between secured and unsecured debt, and how banks buffer risks associated with each type of loan through ...
  3. How Many Times has Warren Buffett Been Married?

    Warren Buffett has been married twice in his life, but the circumstances surrounding the marriages were unconventional.
  4. What's the smallest number of shares of stock that I can buy?

    Many people would say the smallest number of shares an investor can purchase is one, but the real answer is not as straightforward. ...
Trading Center