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Rand Stays Under Pressure

ZAR

Spot USD/ZAR has extended gains as commodity-tied FX struggle to shake off their weakness. The pair last deals at ZAR17.3423, up ~1,550 pips on the day. It topped out at ZAR17.3946, close to key resistance from Jan 6 high of ZAR17.4343.

  • From a cross-asset perspective, the commodity complex remains slightly softer on the day, albeit precious metals have lodged some minor gains. Local-currency bond yields have extended gains, while the curve has steepened. The FTSE/JSE Africa All Share Index sits ~0.6% lower on the session, moving away from all-time highs printed last Friday.
  • Domestic politics remain under scrutiny, with the ANC's NEC due to wrap up its two-day meeting. Looking ahead, President Ramaphosa is expected to convene a Cabinet meeting on Wednesday, in order to discuss the priorities for this year before he delivers his State of the Nation Address.
  • South Africa's budget balance flipped into a surplus of ZAR45.0bn in December from a deficit of ZAR23.5bn prior, matching consensus estimate.

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