Rand Loses Shine Amid Softer Gold Prices

Spot USD/ZAR snaps a three-day losing streak, which saw the pair shed around 3.1% in a relatively short time span. Rand Merchant Bank's yesterday pointed to the role of the potential BHP-Anglo American merger transaction in supporting sentiment towards South African assets, albeit political risk considerations were also in play.

• When this is being typed, USD/ZAR trades at 18.6840, more than 500 pips above neutral levels, as the greenback outperforms. Technically, bulls look for a rebound above Apr 19/Feb 23 highs of 19.3862/99, while bears keep an eye on Apr 9 low of 18.4131.
• SAGB yields have edged lower across the curve, with 10-year breakeven inflation rate sitting at 6.91%, its lowest point in nearly three weeks. Reminder that the National Treasury holds its weekly bond auction today.
• The precious metals subindex took a hit and is 1.6% worse off on the session, with gold changing hands ~$17.7/oz. lower. Bullion is exposed to the influence of Wednesday's FOMC meeting.
• Looking ahead, South Africa's international trade data and budget balance will hit the wires at 13:00BST/14:00SAST.