Rand Turns Bid With BRICS Summit About To Get Underway

Spot USD/ZAR has lost some altitude, pressured by a weaker greenback, while the rand sits atop the EMEA pile at typing. Some degree of optimism about the ongoing BRICS summit might be aiding the South African currency, with investors looking for announcements of fresh investments. The pair last deals at 18.8350, around 1,300 pips lower on the day, with bears eyeing support from the 50-EMA at 18.6001. Bulls see the 76.4% retracement of the Jun 1 - Jul 27 sell-off at 19.3301 as their initial target.

• Rand traders pay close attention to China, where the authorities are trying to shore up the beleaguered yuan. The PBOC delivered another record-breaking USD/CNY mid-point fixing overnight (1,111-pip deviation from BBG estimate), while source reports did the rounds suggesting that "local banks have refrained from providing more of the currency in the swap market" (BBG), while "China's major state-owned banks were seen actively mopping up the offshore yuan on Monday" (RTRS). These dynamics play out against the backdrop of disappointing momentum of China's economic recovery.
• All eyes in South Africa are on the 15th BRICS Summit which begins today in Johannesburg. There will be plenty of top-level meetings on the sidelines of the conference as well.
• South Africa's leading indicator was little changed in June, printing at 108.3 versus 108.4 a month before.