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BofA See End of Fed Tightening Favouring ZAR

EMERGING MARKETS
BofA write that the end of Fed tightening should support EM FX for 6-9 weeks, with ZAR is in a good position to appreciate.
  • They write that the last Fed hike should be positive for EEMEA FX, but performance thereafter depends more on other factors.
  • BofA note that ZAR appreciated after the last hike in all three cycles, which should be the case this time as well. As such, they remain short USDZAR (open: 18.16, target: 17.00).

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