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Risk-Off Continues to Roil The Rand, Despite Positive Political Developments

SOUTH AFRICA
  • USD/ZAR trades -0.42% lower this morning, pulling back from yesterday’s high at 15.8748.
  • The cross drifted higher yesterday amid broad-based risk-off with US equities falling sharply – led by the tech-heavy Nasdaq.
  • SA’s terms of trade also narrowed as precious metals prices fell on the back of a firmer greenback – adding to the pressure on ZAR.
  • The NEC resolution against members affected by the step aside rule is a notably positive political development ahead of the December elective conference with Ramapohosa being the primary beneficiary.
  • Additionally, signs of great private sector involvement in SOEs in the draft economic proposal is another major positive that could reduce the state’s fiscal burden and alleviate risks to growth over the medium to longer term with key reforms.
  • USD/ZAR remains at the mercy of global risk sentiment today in thin holiday markets. Resistance comes in around the 15.80-16.10 zone.
  • Intraday Sup1: 15.7304, Sup2: 15.6805, Res1: 15.8323, Res2: 15.8835
  • SA Terms of Trade


MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com

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