Rand Struggles Amid Eskom Power Cuts, Weaker Precious Metals

USD/ZAR ticks higher this morning, clawing back some of its losses from yesterday. The pair last deals at 18.8622, nearly 450 pips higher on the session. A break above 19.3301, the 76.4% retracement of the Jun 1 - Jul 27 sell-off, is needed to reignite bullish momentum. Bears look for a drop below 18.3805, which limited losses on Aug 24.

• Intensified power cuts continue to present a risk for the rand, with Eskom warning that South Africa might be on the brink of Stage 7 loadshedding and consumers should limit electricity consumption to help avoid that scenario.
• The SARB will announce its monetary policy decision a week from now. USD/ZAR 1-week implied volatility has crept higher this morning in anticipation of the rate decision.
• The composite BBG Commodity Index has edged higher but the precious metals subindex has shed ~0.6% to last operate near its worst levels since August 21.
• South Africa's July mining output data will hit the wires later today.