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Rand Advances After Announcement Of Unity Gov't Plan

ZAR

Spot USD/ZAR trades on the back foot with market participants monitoring progress in coalition talks after the ANC leadership formally backed the proposal to create a national unity government. USD/ZAR 1-year risk reversals rose to fresh YtD highs.

  • USD/ZAR last deals at 18.8528, almost 1,200 pips lower on the session, Bears look for losses towards Jun 3 low of 18.4946. On the flip side, bulls keep an eye on 19.0659, the 76.4% retracement of the Apr 19 - May 21 upleg.
  • SAGB yields are a tad lower, curve runs slightly flatter. South Africa's 10-year breakeven inflation rate has eased to 6.83%.
  • The aggregate BBG Commodity Index has edged lower and the precious metals subindex is little changed on the day, with gold trading marginally weaker.
  • South Africa's net reserves rose to $58.29bn in May from $57.85bn prior. Gross reserves increased to $62.09bn in May from $61.80bn in April.

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