usd/zar carry trade | Forex Factory

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usd/zar carry trade

  • #1
  • First Post: Sep 9, 2008 9:50am Sep 9, 2008 9:50am
I just found a new pair on interbankfx, usd/zar. Its daily swap rate is amazingly $140 a day! Isn't that crazy? You can simply sell 1 lot of this pair and make a living on it.

I am laughing right now. Anyone knows something about zar(south africa rand)?
  • #2
  • Sep 9, 2008 10:51am Sep 9, 2008 10:51am
It moved 4% over the past day or so (volatile)
High pip values, exacerbating the effect of the volatility
The spread is 60 pips

However, $140/standard lot is ridiculously high... I noticed IBFX has a new set of pairs that seem to be specifically targeted at carry traders. I like EUR/DKK too for example. And AUD/CHF pays twice as much as AUD/JPY??? Interesting.
  • #3
  • Sep 9, 2008 1:15pm Sep 9, 2008 1:15pm
yeah the usdzar is probably the most volatile pair out there on the retail market. it moves thousands of pips in hours. this sounds great until you realize the pip cost is like 1-2 dollars per lot. i wouldnt intraday trade it, but i have researche dt a bit as a carry trade for a "super carry basket" that i have been working on. might do pretty well.
  • #4
  • Sep 9, 2008 1:39pm Sep 9, 2008 1:39pm
  •  FxChi
  • | Joined Dec 2007 | Status: Cash Rules Everything Around Me | 749 Posts
Yes I've been looking at this pair too as the volatility on it is incredible, but the spread I have is 125 pips for it. Where can we go to get the fundamental updates about the South African Rand?

I remember reading a while ago, that there are major problems in S. Africa. Power grid problems that disrupts their ability to mine which is a major part of their economy is one thing I remember and I know they were having riots at the time of the article (a few months ago). Situation seemed quite unstable and even though the dollar rally might not be sustainable, I think it's a stronger currency than the ZAR any day of the week. Nonetheless I'd like to see some recent economic data. I also remember that the interest rate was quite high approximately 11% or so and inflation was quite high and unemployment was increasing and GDP was decreasing. The country seemed like it was going through a period of stagflation. I'm thinking the best strategy would be to buy the dips on this one, but I'd like to double check the recent economic data on it to make sure I have my facts straight.

Any info on checking out the fundamental scope is much appreciated!
"Wishful thinking dies hard." Igor T.
  • #5
  • Sep 9, 2008 3:19pm Sep 9, 2008 3:19pm
Quoting FxChi
Yes I've been looking at this pair too as the volatility on it is incredible, but the spread I have is 125 pips for it.
yeah, but the pip cost is only like a dollar so essentially it's 12.5 pips for spread.


Quoting FxChi
I remember reading a while ago, that there are major problems in S. Africa. Power grid problems that disrupts their ability to mine which is a major part of their economy is one thing I remember and I know they were having riots at the time of the article (a few months ago). Situation seemed quite unstable and even though the dollar rally might not be sustainable, I think it's a stronger currency than the ZAR any day of the week. Nonetheless I'd like to see some recent economic data. I also remember that the interest rate was quite high approximately 11% or so and inflation was quite high and unemployment was increasing and GDP was decreasing. The country seemed like it was going through a period of stagflation. I'm thinking the best strategy would be to buy the dips on this one, but I'd like to double check the recent economic data on it to make sure I have my facts straight.
too true. this is exactly why the pair is volatile. the country is just way too unstable at the moment for intraday/day/swing trading. the best bet is carry. in my opinion, thats the only way to go with this pair until SA starts to stabilize.
  • #6
  • Sep 10, 2008 4:14am Sep 10, 2008 4:14am
Hi all

There is another thread here on ff which focuses on this currency pair
http://www.forexfactory.com/showthre...t=71320&page=5

A lot of South Africans and ex-South Africans post there. For fundamentals you might find the following link helpful
http://www.essa.org.za/research/links.htm

regards
Hope isn't a viable investment vehicle.
  • #7
  • Edited Sep 22, 2008 3:15pm Sep 10, 2008 9:39pm | Edited Sep 22, 2008 3:15pm
The key to keeping this trade carry trade profitable is not breaking the upper TL. Then again, unless the ZAR goes into total free-fall, the swap will be able to actually save you from a margin call.
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  • #8
  • Sep 10, 2008 10:22pm Sep 10, 2008 10:22pm
what time frame is it?

1 week? 1 month?
  • #9
  • Sep 10, 2008 11:10pm Sep 10, 2008 11:10pm
Quoting MoreYummy
what time frame is it?

1 week? 1 month?
sorry, weekly.
  • #10
  • Sep 10, 2008 11:16pm Sep 10, 2008 11:16pm
the spread is not that big, because of its value. certainly a volatile pair. very good swap if you can take it.
  • #11
  • Sep 21, 2008 4:38pm Sep 21, 2008 4:38pm
Quoting fierceman
It moved 4% over the past day or so (volatile)
High pip values, exacerbating the effect of the volatility
The spread is 60 pips

However, $140/standard lot is ridiculously high... I noticed IBFX has a new set of pairs that seem to be specifically targeted at carry traders. I like EUR/DKK too for example. And AUD/CHF pays twice as much as AUD/JPY??? Interesting.
Please man!! I'am looking for you for days!
I have also a live account on ibfx and I saw the swap of eur/dkk that is positive if you go buy/sell at the same time with the same amount of lots. That's too crazy, I can't sleep for days!!

Please contact my on private or mail to share the opinions.
  • #12
  • Sep 28, 2008 11:45am Sep 28, 2008 11:45am
I checked price history of last 10 years. It appears to me this pair runs up fast when it rallies. So this is the idea: set stop loss 4000 pips above the closing price of previous month on the first trading day of each month, and when stop loss is hit, open a new short position on the first day of next month.

The swaps give you about 4000 pips a month, which gurantees a win in most months. In 2001, USD/ZAR run up to 13.5 from 9.0, but that run only last 3 month(from september to december). It is all winning month after that.
  • #13
  • Sep 30, 2008 4:54pm Sep 30, 2008 4:54pm
Change of daily swap on ibfx! On all pairs.

I think that they are not normal...
  • #14
  • Sep 30, 2008 5:20pm Sep 30, 2008 5:20pm
They made a correction
  • #15
  • Oct 4, 2010 10:32am Oct 4, 2010 10:32am
I heard a professional trader commented that some of his friends have wiped their accounts due to the volitility of the ZAR comparing to I suppose the USD
  • #16
  • Jan 29, 2012 12:19pm Jan 29, 2012 12:19pm
Oh yes it can volatile but if you live in S.A, you have some advantage of-course. You can visit http://www.tradingeconomics.com/south-africa/currency and http://southafricaeconomywatch.blogspot.com/ for more on the S.A data
  • #17
  • Jul 15, 2015 6:44pm Jul 15, 2015 6:44pm
I am looking at this pair long term (long S.A.) as You get the carry and I think that Africa will be the last untapped investment on earth ..
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  • #18
  • Edited 7:36am Jul 20, 2015 7:21am | Edited 7:36am
the usd/zar has a lot of respect for its ADR
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  • #19
  • Jul 30, 2015 2:50pm Jul 30, 2015 2:50pm
short on top of TL channel + carry
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  • #20
  • Sep 7, 2015 4:26am Sep 7, 2015 4:26am
Is anyone trading the zar anymore its peaked so i cant find any information as to why us/euro has gained so much on it, be a good carry trade if i can figure out why its gone up so high, i wouldnt be sure how much margin i need though.
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