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Rand Loses Yesterday's Shine Despite Strong Performance From Precious Metals


Post-FOMC greenback weakness applied some further pressure to USD/ZAR yesterday evening, helping the pair give away 2.1% from the prior close. The rate has stabilised this morning and is correcting those losses, last trading +460 pips at ZAR17.0900. Bulls look for gains past Jan 6/31 highs of ZAR17.4343/17.4908, while bears keep an eye on the ZAR17.0000 mark.

  • Local-currency bond yields have retraced the bulk of initial dips and last sit 3.9-5.1bp richer across the curve. South Africa's 10-year breakeven inflation rate printed its worst levels in 16 months at 5.69% before recovering to 5.75% where it sits at typing.
  • The aggregate BBG Commodity Index trades 0.35% higher on the day, off earlier highs. The precious metals subindex jumped to new cyclical highs and still trades ~1.7% above neutral levels.
  • The Cabinet lekgotla is currently underway as South Africa's political leaders discuss the priorities and way forward for this year.
  • South Africa's electricity production/consumption data will hit the wires later today.

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