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Rand Trims Recent Gains Following Disappointing Trade Data, Weakness in Gold

ZAR
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USDZAR is trading close to session highs, with the rand on softer footing today following three days of consecutive gains against the greenback. In addition to greenback strength (underpinned by higher US yields following a firmer-than-expected Q1 employment cost reading), weakness in gold is accounting for rand underperformance among its EMEA counterparts. Moreover, a narrower trade surplus than anticipated (ZAR7.3bn vs. ZAR16.5bn expected) is likely providing an additional headwind at the margins.

  • For gold, spot bullion has trimmed what is set to be a third consecutive month of gains, down 1.1% on the session. The 20-day EMA has given way, exposing the April 23 low ($2,291.6/oz), a break of which would signal scope for an extension towards the 50-day EMA ($2,237.6/oz).
  • Looking ahead, the Fed rate decision tomorrow and NFPs on Friday will be the key risk events moving forward. Absa PMI data for April (Est: 50.5; Prior: 49.2) is the only notable release left on the local slate.
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USDZAR is trading close to session highs, with the rand on softer footing today following three days of consecutive gains against the greenback. In addition to greenback strength (underpinned by higher US yields following a firmer-than-expected Q1 employment cost reading), weakness in gold is accounting for rand underperformance among its EMEA counterparts. Moreover, a narrower trade surplus than anticipated (ZAR7.3bn vs. ZAR16.5bn expected) is likely providing an additional headwind at the margins.

  • For gold, spot bullion has trimmed what is set to be a third consecutive month of gains, down 1.1% on the session. The 20-day EMA has given way, exposing the April 23 low ($2,291.6/oz), a break of which would signal scope for an extension towards the 50-day EMA ($2,237.6/oz).
  • Looking ahead, the Fed rate decision tomorrow and NFPs on Friday will be the key risk events moving forward. Absa PMI data for April (Est: 50.5; Prior: 49.2) is the only notable release left on the local slate.