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Rand Continues To Strengthen After USD/ZAR Rejected Key Resistance Earlier This Week

ZAR

Spot USD/ZAR is easing off amid wider greenback weakness and last operates at 19.0793, nearly 1,000 pips lower on the day. The rate rejected resistance from 19.3301, the 76.4% retracement of the Jun 1 - Jul 27 sell-off twice in the recent weeks (Aug 15, Sep 6), which amplifies the significance of that level. On the flip side, a move through Aug 24 low of 18.3805 would signal potential for a deeper sell-off.

  • Political risk premium related to the Lady R affair has arguably receded over the past few weeks, with South Africa seemingly successful in mending ties with the US. Latest press reports suggest that Pretoria is unlikely to expel the current US envoy, who made explosive allegations surrounding the docking of Russian Lady R ship in South Africa, which rattled local financial markets a few months ago.
  • Eskom de-escalated loadshedding by one notch to Stage 5 and will publish the weekend schedule of power outages this afternoon.
  • SARB Governor Lesetja Kganyago may speak later today.

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