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Rand Returns To Negative Territory, Trade Concerns Linger

ZAR

Greenback sales related to the release of US CPI data helped USD/ZAR briefly reverse earlier gains, but the move lower proved short-lived. The rate has now unwound post-CPI move and changes hands at ZAR18.5892, up 190 pips on the day.

  • The rand has come under pressure today after a group of senior US lawmakers asked the White House to reconsider holding the annual AGOA Forum in South Africa, with the nation being at risk of losing its preferential trade status due to its stance on Russia. South Africa's DIRCO denied any plans to move the event to another venue.
  • Shorter-end USD/ZAR risk reversals continue to move lower, printing new cyclical lows. One-month tenor has broken below the 2.00% figure for the first time since mid-May.

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