Rand Remains Weak Despite USD Depreciation

Spot USD/ZAR remains afloat as a divergence opens between the pair and the declining BBDXY index. The South African Rand remains vulnerable due to the lingering Eskom worry, with officials struggling to find quick solutions to alleviate the deepening energy crisis.

• News24 reported that during a series of meetings on Monday, Eskom and National Treasury clashed over who should pay for the purchases of more diesel that would be used to reduce load-shedding. According to the report, "the key message from the Eskom board and management was that load-shedding is here to stay for the next two years."
• The commodity complex has strengthened, with the aggregate BBG index last seen ~0.3% better off. The precious metals subindex remains weaker on the day, last operating ~0.5% below neutral levels.
• When this is being typed, USD/ZAR deals at ZAR17.1360, up 1,150 pips on the day. A clean break above the nearby 50-DMA would expose key near-term resistance from Jan 6 high of ZAR17.4343.