Rand Falters Amid Weak Sentiment

Spot USD/ZAR staged a decent rally yesterday, adding more than 2.5% as risk sentiment soured. The rate continues to creep higher this morning, as the downgrade to US credit rating announced by Fitch overnight keeps market mood subdued.

• The pair last deals at 18.3820, up 800 pips on the session, and has pierced resistance from the 50-EMA at 18.3457. The next target on the topside is 19.1533, the high print of Jul 7. Bears look for losses towards Jul 27 low of 17.4193.
• The composite BBG Commodity Index has shed the bulk of its opening gains and last sits just ~0.2% above neutral levels. The precious metals subindex remains afloat, last sitting ~0.5% higher on the day.
• SAGB yields are slightly higher across the curve, with South Africa's 10-year breakeven inflation rate last seen at 6.55% after hitting new three-week highs.