Rand Edges Lower, Precious Metals Falter

Spot USD/ZAR trades above neutral levels after struggling for a clear direction throughout the early part of the session. The pair last deals at ZAR18.3876, up 415 pips on the day. From a technical standpoint, bulls need a break above the 20-EMA at ZAR18.9468 to improve their position. Bears look for further losses past two intraday lows printed in April in the vicinity of the ZAR20.00 figure.

• Foreign affairs remain front and centre. South Africa's top diplomat said that the country would not change its foreign policy based on trade benefits, but would like to remain part of the AGOA. Meanwhile, Defence Minister denied allegations that South Africa may have supplied weapons to Russia.
• Local-currency bond yields have crept higher, with 10-year breakeven inflation rate rising to 6.83%.
• The composite BBG Commodity Index has recouped initial losses, but the precious metals index has shed nearly 1.5% this morning.