Rand Outperforms EMEA Peers, Prints New Two-Week Highs

Spot USD/ZAR comes under pressure and falls to its worst levels in two weeks, last changing hands at 18.6833, more than 1,100 pips lower on the day. The rand outperforms even as the BBDXY Index remains afloat. The move helps USD/ZAR trim its monthly advance to 1.8%, which remains its best performance since August, when it registered gains to the tune of 5.8%.

• Market participants have seemingly shrugged off President Ramaphosa's warnings of a potential international backlash against his country's decision to take Israel to the ICJ over the situation in Gaza, as well as the IMF's decision to cut South Africa's growth outlook for this year.
• The commodity complex is slightly softer today, albeit the gauge of precious metals strength has improved by 0.3%. SAGB yields are a tad firmer, with 10-year breakeven inflation rate little changed at 6.31%.
• The focus today is on South Africa's December trade balance, due for release at 12:00GMT/14:00SAST. Per BBG consensus, surplus may have narrowed to ZAR10.0bn from ZAR21.0bn prior.
• Technically, bears look for USD/ZAR to breach 18.5385, which cushioned losses on Jan 12. On the flip side, the focus is on 19.2180, the high print of Jan 22.