Rand Edges Ahead Of EMEA Peers, USD/ZAR Poised To Snap Three-Week Winning Streak

Spot USD/ZAR is on track for its first weekly loss after three consecutive weeks of gains, with the rand taking respite in benign CPI inflation readings (lowering the odds of further monetary tightening into a struggling economy), a raft of investment deals struck by South Africa on the fringes of the BRICS summit (particularly with China), as well as steady levels of loadshedding as the winter season (April 1 - August 31 in Eskom's forecast models) draws to a close.

• The announcement of an invitation for six nations, out of which only Argentina is classified as a democracy, to join BRICS next year has sparked concerns of a growing anti-Western skew of the bloc that could drive a wedge between South Africa and its major Western trading partners. However, aforementioned factors have seemingly outweighed these worries.
• At typing, USD/ZAR trades at 18.6100, around 2,060 pips below neutral levels, having retraced more than half of yesterday's upswing. The rand outperforms its EMEA peers today and lags only the TRY on a weekly basis, following a larger-than-expected rate hike in Turkey. Global factors, including China's economic woes and the Jackson Hole symposium, provide notable points of interest.