Commodity Weakness Adds Pressure To Rand

Greenback strength has helped drag USD/ZAR higher today, albeit the rand's losses against all its EMEA peers suggest that its weakness is more broad-based. Spot USD/ZAR has now added nearly 2,000 pips to last trade at 18.7194.

• An interesting technical picture has formed in daily ZAR/JPY chart. During a recent corrective pullback, which coincided with the RSI's return from overbought territory, the rate rejected support from its 200-DMA. The subsequent uptick in the spot rate failed to push the RSI back above the 70 threshold. Should price action break below the 200-DMA alongside a more meaningful decline in the RSI, bears could count on a deeper sell-off. For now, these signals are still tentative.
• Continued weakness in the commodity space might be exerting some additional pressure to the rand, with the aggregate BCOM Index down ~0.8% and the precious metals subindex down ~0.5% at typing.
• Eskom will suspend load-shedding between midnight and 05:00, later moving to Stage 1 until 16:00 and Stage 3 until midnight. This pattern will repeat on Thursday and Friday.
• President Cyril Ramaphosa may soon announce the list of participants of the upcoming BRICS summit, with his spokesman suggesting that he is holding final consultations with the bloc's leaders.