Rand Regains Poise Amid Trade Musings

Spot USD/ZAR faltered again after pausing an eight-day sell-off on Tuesday as worries surrounding US-SA trade relations resurfaced. The rate has turned heavy again amid, with a familiar price pattern manifesting today, as USD/ZAR sold off into the London morning. With the pair trading at ZAR18.5180, around 1,100 pips shy of neutral levels, bears look for losses past the nearby ZAR18.50 figure and further towards ZAR18.00. Bulls see the 20-EMA at ZAR19.0219 as their initial target.

• The rand appeared unfazed by the PBOC's surprise cuts to its short-term borrowing rates and press reports flagging potential for more stimulus in China, which stole the limelight on Tuesday. The trajectory of the economic recovery of South Africa's largest trading partner typically draws much attention as an important indicator of demand for local commodity exports. However, a sense of optimism about China could lend some support to the rand, alongside some stabilisation in South Africa's energy situation.
• South African officials sought to allay concerns over the country's trade relationship with the US. which came under scrutiny as senior US lawmakers suggested that the sub-Saharan nation could lose its AGOA status over its Russia stance. Pretoria was adamant that its relations with Washington are intact, while no further details on any possible punitive measures emerged, which has soothed the nerves of investors.