Rand Weakens To Three-Year Lows, SARB Speak Under Microscope

USD/ZAR broke above crucial resistance from Mar 8 high of ZAR18.7192 this morning, building on yesterday's 1.7% upswing as the South African rand remains the worst performing EMEA currency. The pairs latest upleg comes despite fairly limited gains for the BBDXY index, with South Africa's ongoing energy crisis sapping strength from the local currency.

• Spot USD/ZAR last trades at ZAR18.8147, up ~1,810 pips on the day, after printing new three-year highs at ZAR18.8368. With the ZAR19.00 figure in sight, a move through that level would expose Apr 6, 2020 high of ZAR19.3508. Bears see the 50-EMA at ZAR18.2135 as their initial target.
• Local-currency bonds have now trimmed their morning losses but continue to trade on the back foot after a dismal performance yesterday, with yields refreshing five-month highs this morning. South Africa's breakeven inflation rate surged to 6.88% before easing to 6.81% where it sits at typing.
• The commodity complex is weaker, with the BBG Commodity Index trading ~0.7% lower and the precious metals subindex last seen ~0.4% worse off.
• Comments from local central bankers will be closely watched today. In the absence of domestic data releases, the focus on that front turns to the U.S. CPI report.