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Nedbank Sees Limited Scope for Downside as USD/ZAR Hits 14.00

SOUTH AFRICA
  • USD/ZAR Pulled back from a 16-month low in yesterday's session, having briefly traded a fraction below 14.00 on the back of further USD weakness.
  • Positive local political developments, coupled with strong ZAR fundamentals, have supported the currency in recent months.
  • However, Nedbank has noted that further USD/ZAR downside may be limited as the cross is close to fair value and will be dependent on dollar weakness for more traction below 14.00.
  • Third wave concerns becoming louder as health experts warns of revisions to model estimates for a mild third wave based on the appearance of new variants.
  • Murmurings of Cabinet reshuffles also starting to re-emerge in local press, and may become louder now that Magahsule's suspension has been confirmed.
  • However, this is by no means the end of the political rumblings within the ANC with eyes on the prospect of an RET breakaway in the coming months.
  • Union negotiations remain deadlocked, with the threat of a national strike rising.
  • Dollar weakness supporting upside in precious metals in recent sessions, but trading mostly subdued today.
  • Intraday Sup1: 13.9631, Sup2: 13.9326, Res1: 14.0768, Res2: 14.1536
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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