Rand Trims Losses But Remains Second-Worst EMEA Performer Today

Spot USD/ZAR is reducing its earlier advance, in a move that is facilitated by broader greenback weakening. The BBDXY (-0.17%) took a hit as US core PCE Y/Y print came in a touch softer than expected, as did personal spending. While this is being typed, USD/ZAR trades at 18.9010, after failing to make any significant headway beyond the 19.00 figure. Still, the rand remains the second-worst EMEA performer after the Russian ruble today.

• Renewed selling pressure in USD/ZAR may have been strengthened by the earlier release of South Africa's wider than forecast trade surplus for the month of May coupled with a slimmer than expected budget deficit.
• A story surrounding the conclusion of the Public Prosecutor's investigation into the Phala Phala scandal has appeared on local front pages, possibly reducing domestic political risk to a degree. Note that the report clearing President Ramaphosa of any wrongdoing merely confirmed the findings of a preliminary report from March.
• Citi wrote that USD/ZAR was supported today because local corporates hedged their ZAR exposure into the quarter-end, which allowed the pair to test the 19.00 level. They said that they were "not sure if 19+ is sustainable as there are way more questions on the way higher rather than lower."