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Last night South Africa’s Government sacked its Finance minister, leading to a sharp sell-off in the ZAR on political uncertainty. The ZAR hit a record low against the USD and tanked by as much as 6 percent against GBP yesterday. The Rand was already under pressure from a commodities rout.

The Kiwi dollar has rallied overnight despite the RBNZ cutting rates to a new record low of 2.5 percent. It was the delivery of the cut which sent the NZD higher, with the RBNZ suggesting this cut will be the last with inflation now expected to shift higher. GBP/NZD is at risk of a move down to new multi-month lows.

High on the agenda today will be the Swiss National Bank’s rate decision at 08:30 with the risk of the Swiss retaliating to the ECB’s decision to launch more stimulus last week. But the Euro’s surge last week does ease pressure on the SNB to act and weaken the Franc.

Next up will then be the Bank of England’s rate decision at 12:00. The challenge for Governor Mark Carney will be to try and sound hawkish with UK inflation at -0.1 percent. A dovish BOE could leave GBP vulnerable with investment banks already eyeing the Brexit risk in 2016.

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