Positive Data Surprises, Precious Metals Strength Help Rand Extend Its Rally

Spot USD/ZAR continues to lose altitude and last changes hands at ZAR18.8313, down 2,607 pips on the day, with the rand sitting atop the EMEA pile. The rate has pierced support from its 50-EMA intersecting at ZAR18.8653, with bears looking for further sales towards May 2 high of ZAR18.5075.

• Better-than-expected data may have helped bolster the rand today. Current-account deficit narrowed more than forecast in Q1, while industrial output unexpectedly grew on a M/M basis. However, the immediate reaction to the release of these data was limited.
• Another source of rand strength could be the commodity complex, with the aggregate BBG Commodity Index adding ~0.6% thus far. This has been driven by sharp gains for precious metals, with the relevant subindex up ~0.8% and gold up $28.8/oz on the session.