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ZAR: Rand Extends Losses After 19.0 Threshold Gives Way

ZAR
EM BulletBulletEmerging Market News

USD/ZAR extends its bullish run, the magnitude of which has now reached 12.8% (bottom to top). Following Friday's breach of the 19.0 figure on the back of expectation-busting US NFP data, the pair has crept higher still and last deals at 19.1851, almost 800 pips better off. The previous day's peak remains intact but a break here would open up Apr 23 high of 19.2696. On the other hand, the RSI is having a look into overbought territory (above 70) again, with bears looking for a pullback towards Jan 6 low of 18.4323.

  • President Ramaphosa pledged to promote the renewal of the ANC after its lost parliamentary majority in last year's general election. The leader insisted that state power remains and "will always be" in the hands of the ANC and took a swing at the party's various rivals.
  • Enthusiasm generated by the formation of a big-tent pro-reform coalition after the election gradually dissipated over the subsequent months, with the rand now giving away all of the resultant gains. The focus has moved to other factors, including geopolitics and the consequences of the incoming Trump presidency.
  • SAGB yields rose across the curve in morning trade, playing catch-up with US Tsys. South Africa's 10-year breakeven inflation rate has climbed to 5.82%, its highest point in five months. The 5-year breakeven rate now sits at 4.65%, testing two-month highs and moving above the +4.5% mid-point of the SARB's inflation target.
  • The composite BBG Commodity Index gapped higher and is now 0.9% better off, which comes after two consecutive days of sharp gains. However, the precious metals subindex has inched lower and gold changes hands ~$3.2/oz. below neutral levels.
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USD/ZAR extends its bullish run, the magnitude of which has now reached 12.8% (bottom to top). Following Friday's breach of the 19.0 figure on the back of expectation-busting US NFP data, the pair has crept higher still and last deals at 19.1851, almost 800 pips better off. The previous day's peak remains intact but a break here would open up Apr 23 high of 19.2696. On the other hand, the RSI is having a look into overbought territory (above 70) again, with bears looking for a pullback towards Jan 6 low of 18.4323.

  • President Ramaphosa pledged to promote the renewal of the ANC after its lost parliamentary majority in last year's general election. The leader insisted that state power remains and "will always be" in the hands of the ANC and took a swing at the party's various rivals.
  • Enthusiasm generated by the formation of a big-tent pro-reform coalition after the election gradually dissipated over the subsequent months, with the rand now giving away all of the resultant gains. The focus has moved to other factors, including geopolitics and the consequences of the incoming Trump presidency.
  • SAGB yields rose across the curve in morning trade, playing catch-up with US Tsys. South Africa's 10-year breakeven inflation rate has climbed to 5.82%, its highest point in five months. The 5-year breakeven rate now sits at 4.65%, testing two-month highs and moving above the +4.5% mid-point of the SARB's inflation target.
  • The composite BBG Commodity Index gapped higher and is now 0.9% better off, which comes after two consecutive days of sharp gains. However, the precious metals subindex has inched lower and gold changes hands ~$3.2/oz. below neutral levels.