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Rand Among Top EM Currencies as USDZAR Pierces 50-Day EMA Again

The rand has extended gains throughout Monday’s session, with USDZAR down just over 1% on the day at typing. The local currency is among the top performers in the EMEA space, shrugging off the moderate declines seen in the Bloomberg Commodity Index and precious metals subindex. MTD, only the Polish zloty has made more spot gains against the dollar (+3.81%) than the rand (+2.26%) in the EMEA space.
  • From a technical perspective, the trend outlook in USDZAR is unchanged and remains bullish. The latest move lower is considered corrective, despite a key support area around the 50-day EMA – at 18.9376 – having been pierced again today. A more sustained break of this average would signal scope for a deeper retracement and expose 18.3805, the Aug 24 low.
  • Wednesday’s CPI release is the key highlight on the docket this week. Headline inflation likely accelerated from +4.8% y/y in August to +5.4% in September, while the monthly figure is seen rising to +0.6% from +0.3% prior.

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