Rand Loses Ground For Third Straight Day

Spot USD/ZAR gains for the third consecutive day, with the rand lagging all its EMEA peers. The pair changes hands at 19.3051 (+1,000 pips on the session), testing resistance from the 76.4% retracement of the Jun 1 - Jul 27 sell-off at 19.3301. A break here would open up the 19.50 figure. Conversely, bears see Aug 24 low of 18.3805 as their initial target.

• Greenback strength has been a key theme for FX markets at the start to the week, inviting reactions from Japanese and Chinese officials overnight. In Asia's largest economy, the PBOC delivered the strongest pushback against yuan depreciation on record via its daily USD/CNY mid-point fixing. The redback has been facing headwinds amid weak data out of China, which has had knock-on effects on the rand.
• Several sell-side desks revised their 2023 growth outlooks for South Africa higher, following the release of better-than-forecast Q2 GDP data yesterday. However, Absa and Nedbank warned that the economy is facing intensified challenges in 2H.
• The aggregate BBG Commodity Index has shed ~0.2% this morning, with the precious metals subindex also down ~0.2% on the day.
• The Bureau for Economic Research will publish South Africa's Q3 business confidence data at 11:00BST/12:00SAST.