Rand Registers Gains, Aided By Firmer Precious Metals & Domestic Considerations

Last week's upswing in spot USD/ZAR has lost steam at the start to the week, with the pair turning lower again. Optimism surrounding South Africa energy situation and foreign policy, as well as firmer precious metals and potential profit-taking in the wake of last Friday's move may have all conspired to push USD/ZAR higher this morning.

• The pair last deals at ZAR18.5941, just over 1,600 pips lower on the day. Technically, losses past Jun 16 low of ZAR18.1250 would expose the ZAR18.00 figure. Conversely, bulls look for gains above the 50-DMA, which kicks in at ZAR18.7921.
• From a cross-asset perspective, local-currency bond yields have eased across the curve, with 10-year yield hitting new multi-week lows. The BBG Commodity Index sits ~0.4% higher, but the precious metals subindex has added ~0.8%.
• The Sunday Times reported that Russian President Vladimir Putin will likely skip the upcoming BRICS summit, which would help South Africa avert a further deterioration in its diplomatic relations with the West.
• Goldman Sachs revised their USD/ZAR forecasts lower across 3-, 6- and 12-month horizons, citing "a potentially more risk-supportive global backdrop," as well as local data "increasing the likelihood that the hiking cycle is complete" and less severe winter power rationing.