Rand Loses Ground Amid Softer Commodity Prices

USD/ZAR has crept higher today amid broader greenback outperformance and weak showing from commodity-tied currencies. The pair last operates at ZAR17.3055, up ~1,380 pips, with bulls looking for a rally towards ZAR17.9383, the 61.8% retracement of the downleg between Oct 13 - Nov 30. Conversely, bears set their sights on key support from Nov 30 low of ZAR16.8980.

• USD/ZAR implied volatilities have eased off recent cyclical highs amid the removal of risks associated with perceived potential for President Ramaphosa's departure.
• The commodity complex has softened, with the BBG Commodity Index last 0.6% lower on the day. The precious metals subindex has shed 2.1% so far.
• Local-currency bond yields sit marginally higher across the curve, with 10-year breakeven inflation rate last at 6.26%.
• South Africa's non-farm payrolls grew 0.1% Q/Q in the three months through end-October, missing the 0.5% consensus forecast. Elsewhere, factory-gate inflation decelerated to +15.0% Y/Y in November, printing below the +15.3% estimate. None of the data releases provoked much reaction in the Rand.
• Reminder that South Africa will observe a public holiday tomorrow.