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Rand Edges Higher Amid Firmer Gold Prices, Political Musings Take Centre Stage

ZAR
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USD/ZAR stays under pressure, with the outlook still bearish after the formation of a "death cross" earlier this month. The RSI is flirting with oversold levels, although has not yet moved into that territory. Implied volatility remains elevated ahead of the upcoming elections, with two-week tenure soaring further to its multi-month highs.

  • The spot rate refreshed five-month lows this morning and last deals at 18.1553, just over 100 pips worse off on the session. Support from Dec 15 low of 18.1092 has held firm, but a break here would open up the round figure of 18.0. Conversely, bulls look for a return above the 20-EMA at 18.4897.
  • Next week's general elections continue to provide a focal point in South Africa. The Constitutional Court's verdict banning ex-President Zuma from running in the elections put a light bid into the rand, but it was promptly retraced and fades into insignificance in the context of intraday price action.
  • The commodity space is firmer (+0.8%) and precious metals outperform (+1.7%). Gold trades ~$29.0/oz. higher on the day, likely lending some support to the rand.
  • SAGB yields are a tad lower across the curve, 10-year breakeven inflation rate sits at 6.58%, its lowest point since mid-March.
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USD/ZAR stays under pressure, with the outlook still bearish after the formation of a "death cross" earlier this month. The RSI is flirting with oversold levels, although has not yet moved into that territory. Implied volatility remains elevated ahead of the upcoming elections, with two-week tenure soaring further to its multi-month highs.

  • The spot rate refreshed five-month lows this morning and last deals at 18.1553, just over 100 pips worse off on the session. Support from Dec 15 low of 18.1092 has held firm, but a break here would open up the round figure of 18.0. Conversely, bulls look for a return above the 20-EMA at 18.4897.
  • Next week's general elections continue to provide a focal point in South Africa. The Constitutional Court's verdict banning ex-President Zuma from running in the elections put a light bid into the rand, but it was promptly retraced and fades into insignificance in the context of intraday price action.
  • The commodity space is firmer (+0.8%) and precious metals outperform (+1.7%). Gold trades ~$29.0/oz. higher on the day, likely lending some support to the rand.
  • SAGB yields are a tad lower across the curve, 10-year breakeven inflation rate sits at 6.58%, its lowest point since mid-March.