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Idiosyncratic factors result in some fresh cycle lows outside of the Asia-Pac region, notably in South Africa and Mexico.

  • The rand tumbles after a new Covid-19 variant of "serious concern" was found in South Africa, resulting in an emergency meeting of the WHO. While the implications are not yet clear, there is concern that the heavily mutated variant could evade immunity and cause a deadly wave of infections in South Africa. The UK has banned inbound flights from six African countries as a precaution amid worries of potential international spread, while Hong Kong found two cases in its quarantine facility.
    • USD/ZAR has surged past ZAR16.0000 for the first time since Nov 2020. The rate operates at ZAR16.1669, up ~2000 on the day as we type, with bulls looking for a further rally past ZAR16.4868, which capped gains on Oct 28 & 29, 2020.
  • The Mexican peso has been offered amid turmoil surrounding the nomination of the new Banxico chief. President Obrador tapped a Finance Ministry official with little experience in monetary policy to take the reins, which inspired speculation that the central bank's independence could erode.
    • USD/MXN last seen at MXN21.6761, ~1080 pips higher on the day, after hitting best levels in a year. The next layer of resistance is provided by Nov 4, 2020 high of MXN21.9782.