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Rand Draws Support From Precious Metals Strength

ZAR

The South African Rand has resumed gains after rallying last Friday and sits atop the EMEA pile again, as shares in local precious-metals producers have surged alongside precious metals themselves.

  • When this is being typed, spot USD/ZAR trades at ZAR18.1695, down 1,480 pips on the day. The RSI has charted a bearish failure swing and should the rate stage a clean break under Mar 3 low of ZAR18.0825, it would confirm potential for a deeper sell-off. Conversely, bulls look for a renewed attack on Mar 8 high of ZAR18.7192.
  • The collapse of Silicon Valley Bank sent market participants look for safety, bolstering demand for gold and other precious metals at the start to the week. Although the aggregate BBG Commodity Index sits marginally below neutral levels, the precious metals subindex has added ~1.4%, printing new one-month highs.
  • Local-currency bonds have advanced, while the yield curve has steepened this morning, with core FI space turning bid. South Africa's 10-year breakeven inflation rate has eased to 6.22%.

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