ZAR: Rand Stabilises After Trump-Induced Whipsaw

Spot USD/ZAR retraced its initial upswing yesterday, with wider greenback gyrations helping drive the pair on both swings. The rand came under additional pressure owing to US President Trump's threat to cut aid to South Africa, but initial concerns seemingly dissipated later on. The pair has been hovering above neutral levels, last dealing at 18.7533. On the topside, the focus is on Jan 13 high of 19.2296. Initial support is at 18.3022, the low print of Jan 24.

• Key players on South African political scene closed ranks in the face of Trump's comments on the recently signed Expropriation Act, pushing back against his threats of punitive measures. President Cyril Ramaphosa will be seeking contact with his US counterpart to explain the situation and defuse tensions.
• Meanwhile, Ramaphosa is also expected to attend a regional security summit in Tanzania this Saturday. The event will also be attended by Congolese President Felix Tshisekedi and Rwandan President Paul Kagame. South African peacekeepers remain stranded in Congo amid intensified fighting with Rwandan-backed M23 rebels.
• SAGB yields sit a tad lower across the curve. South Africa's 5-year and 10-year breakeven inflation rates sit at 4.35% and 5.53% respectively. The National Treasury will today sell ZAR1.25bn of 8.25% 2032 bonds, ZAR1.25bn of 8.50% 2037 bonds and ZAR1.25bn of 8.75% 2048 bonds.
• The composite BBG Commodity Index has shed around 1%, while the precious metals subindex is 0.5% worse off.