By DailyFX - South African Rand - Commodities And Inflation Leverage Rand On Dollar Weakness. It was a combination of US dollar weakness and a...

... modest bid under the South African rand that drove the USDZAR lower on the final session of the week.

Fridays close was the lowest in over a month after a 1000-point decline ended liquid spot trading
at 7.4125. Technically speaking, though the daily bar was able to clear the
resistance level that was in place June and Septembers range high, arousing
momentum into a further decent could be difficult to achieve. Spot is now hovering
in a congestion zone between 7.4500 and 7.2850 which could hold up trading in the
days ahead long enough for the tides to change. In other news, though the South
African currency was strengthening, equities indices were notching up their third
consecutive decline. The Africa Top-40 index dropped 0.75 percent to 21,052.34 led
by Anglo American Plc and BHP Billiton precisely because the appreciating currency
would further weigh on the vital export industry. Aside from the disappointing
performance in stocks however, South African fundamentals were boosting investor
optimism. Commodities prices were helping to offset fears of the appreciating
currency. Gold prices rose 0.5 percent to $599.95 per troy ounce in New York.
Monday brings September credit lending and money supply, the later of which could
further stoke the hawkish tone in the market and in the central bank.

Mexican Peso

- Peso Finishes Week Higher on Poor US Data and Oil Prices

The Mexican peso continued to set fresh 7-month highs, as poor US GDP results
allowed pushed the USDMXN as many as 500 points off of its open through the close.
Selling pressure on the currency pair proved insufficient, however, as a later rally
left it just slightly above yesterdays closing price. The days economic news
was enough to add over 100 basis points to the MXN advance, but a squaring of trades
ahead of the weekend forced a short-cover rally in the US dollar against its Mexican
counterpart. Central bank officials left the official overnight lending rate at 7.00
percent allowing a further rally in domestic fixed income markets. Mexican 10-year
bonds added 25 centavos to 99.88, with yields dropping 3 basis points to 5.639
percent. Subsiding fears of inflation have allowed government bonds to rally,
narrowing the yield spread between US and Mexican debt and sparking a downturn in
the USDMXN exchange rate. Continued bullishness in Mexican assets was not enough to
drive domestic equities higher, however, as the Bolsa Index dropped a whopping
598.56 points to 22,762.86. Despite a bullish earnings report from market
heavyweight America Movil, traders cited profit-taking as the reason for the broader
declines. Regardless, the Bolsa remains 5.2 percent higher on the month, as global
equity markets venture into un-chartered highs. Traders now look forward to the
coming weeks government spending and Consumer Confidence reports. Risks arguably
remain to the downside for the Mexican Peso, as it continues to make new highs
against its US counterpart. As such, negative surprises in economic data could cause
the USDMXN to retrace some of its recent declines.

Nordics Swedish, Norway and Denmark

- Swedish Indicators Strong, But NOK The Big Mover

The Nordics were on the move Friday, though they were not moving in a consistent
direction. The only currency with any viable scheduled economic release for the day
was able to push ahead. After positive reports of retail sales and consumer
confidence, the Swedish Krona advanced for the first day in four against the euro.
A touch and retracement on the 100-day SMA in the EURSEK led the pair to shed 105
points 9.2150. Following in the SEKs footsteps, the Danish Krona was
appreciating against the US currency. The USDDKK dropped another 215 points to move
below the confluence of the 100 and 200-day SMA and bring the 5.8500 support into
the picture. Breaking the trend however, the Norwegian Krona was obeying its moving
averages and its pairings were moving in the cross currencies favor. The EURNOK
bounced off the 50-day SMA to notch up a 70 point advance, the first in seven
sessions, to 8.3340. What was more noteworthy for the NOK however was its week long
advance against the US dollar. Though the USDNOK was bouncing off of its 50-day SMA
acting as support, the week-long decent allowed the NOK achieve the distinction of
the biggest advancer against the US currency with a 2.1 percent move. Across the
equities markets, the Nordic indices were marking up their first decent in three
days as the regions biggest oil companies lost share value with a contraction
in the underlying commodity. Retail sales, consumer confidence and manufacturing
confidence were released simultaneously to add a bias to the currency. Vying for a
positive bias in consumer sector, September retail sales grew a greater than
expected 0.7 percent while optimism in October grew to 19.5. Third quarter factory
sentiment diluted the support however, slipping from an 8 print to 5.

Hong Kong Dollar

- Broader Asian Strength Pushes HKD Higher

The Hong Kong dollar followed the worlds major currencies in moving higher
against its US counterpart, as the USDHKD reached fresh two-month lows on the
largest single-day range since July. Fixed income flows boosted demand for the
domestic currency, with the Hong Kong 10-year Government bond adding nearly 50 cents
to 107.579 and Yields 6 bp lower to 3.915 percent. Bullishness failed to extend to
equity markets, however, as the Hang Seng index backed off of recent highs and
dropped 0.3 percent to 18,297.55. As with other world stock markets, dealers said
that profit-taking led the declines as the fundamental outlook on domestic industry
remains relatively unchanged. Indeed, any further moves may have to wait for the
coming week of Retail Sales results through September, with median analyst forecasts
calling for higher annual growth on the month. The closely-followed measure of
consumer spending may likewise weigh on currency markets, as speculation of
impending central bank intervention likewise leads fears of a retrace in the Hong
Kong dollar.

Singapore Dollar

- SGD Closes at 9-year High on USD Weakness/JPY Strength

The Singapore Dollar closed at 9-year highs against its US namesake, as traders rode
on Greenback bearishness to extend the USDSGDs marked decline. Despite a
retracement in the domestic Straits Times index and little-changed bond prices, the
Singaporean currency broke Mays highs to reach its strongest levels in nearly a
decade. Indeed, the domestic ST Index finally showed signs of weakness, falling off
intraday records to close 0.4 percent lower at the end of Friday trading. Much like
we saw across other world equity markets, traders cited profit-taking as the primary
reason for the moderate sell-off. Capital from stock markets likewise shifted to
fixed income issues, with the Singapore Government 10-year bond 10 cents higher at
104.80. Yields lost a single basis point to 3.178 percent. Traders next look to the
coming weeks unemployment and business strength data for further indication of
the direction of Singaporean growth. Given the domestic currencys marked
appreciation, speculators now claim that the Monetary Authority of Singapore may
intervene to push the USDSGD higher in short term price action.