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Rand Weakens Amid Ongoing Debate On Energy Situation

ZAR

Spot USD/ZAR has moved further into positive territory as above-forecast US initial jobless claims lent some support to the greenback. The rate topped out at ZAR18.5373 before easing off and last deals at ZAR18.4930, ~1,770 pips higher on the day. The rate is moving away from recent cyclical lows after refusing to test the psychological ZAR18.00 figure, which limited losses during two trading sessions in April and is located in the vicinity of the pair's 200-DMA.

  • Moody's warned that South Africa's energy system is poised to remain under severe pressure this year, despite efforts to improve generation capacity, with the construction of new power plants and the roll-out of renewable capacity hitting snags. JP Morgan struck more optimistic notes, writing that "a dynamic response to the electricity crisis is at last underway" and "while there are risks of delays, recent progress is encouraging."

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