Rand Weakens In Morning Trade, South African Inflation Expectations Rise

USD/ZAR has crept higher into the London morning, which may have been facilitated by recovery in broader greenback strength, although the BBDXY index has only just returned to neutral levels. The rate last trades at 18.8702, up ~950 pips on the session, with former trendline support (18.9569) under threat. A break here would open up last Friday's high of 19.0434. Conversely, bears look for a pullback towards Jun 27 low of 18.4310, followed by Jun 16 low of 18.1250.

• South African average inflation expectations for 2023 rose by 0.2pp to +6.5% in Q2, according to the latest BER survey. Expectations for 2024 and 2025 rose by 0.1pp to +5.9% and +5.6% respectively. The SARB seeks to anchor inflation expectations at the +4.5% mid-point of its official target range. South African FRA contracts edged higher on the release of the data, but otherwise remain in a familiar range. The SARB will hold its next monetary policy meeting on July 20.
• South Africa's May electricity production/consumption data will cross the wires later today.
• The BBG Commodity Index sits ~0.2% lower on the day, with the precious metals subindex also down ~0.2%.