Rand Slips Amid Softer Precious Metals & Negative Eskom Heads, Awaits CPI & SARB Decision

Spot USD/ZAR has ticked higher at the start to the week, even as the greenback generally trades on a softer footing, with the BBDXY Index hitting its worst levels in two and a half months. The rate last deals at 18.4260, up ~670 pips on the day, with Nov 10 high of 18.8057 providing the initial bullish target. Bears look for a pullback towards the 18.00 mark and 17.9434, the 76.4% retracement of the Jul 27 - Oct 6 bull phase.

• The rate started the week on the back foot, with some pointing to S&P's decision announced late doors on Friday to keep South Africa's credit rating and outlook unchanged. However, the pair reversed losses into EMEA morning hours, possibly amid cautious mood in the lead-up to this week's South African CPI data and the final SARB rate decision of 2023.
• From a cross-asset perspective, the composite BBG Commodity Index has shed 0.2% this morning, with the precious metals subindex down 0.5%, which may be adding some pressure to the rand. SAGBs are little changed, unwinding the bulk of initial gains, with 10-year breakeven inflation rate sitting at 6.66%.
• Electricity Minister Ramokgopa expressed disappointment over recent grid performance, pointing to an increase in the unplanned capacity loss factor.