May 30, 2024 09:08 GMT
Rand Weaker & Volatile In Reaction To Election Headlines
ZAR
Election results keep trickling in, providing the main driver of ZAR price action today. Although most EMEA currencies are struggling against the greenback, the rand has been the worst performer in the space by a comfortable margin and is among the bottom four performers among all 151 currencies tracked by Bloomberg.
- South African assets came under pressure as a model developed by state-owned Council for Scientific and Industrial Research (CSIR) showed that the ANC was on track to garner just 42% of the vote, which raises uncertainty around post-election coalition scenarios, while keeping the least market-friendly ones on the table.
- While keeping an eye on incoming election results, participants also look ahead to the announcement of the SARB's rate decision at 14:00BST/15:00SAST. The central bank is expected to leave policy on hold. Elsewhere, April PPI and budget data will cross the wires later today.
- Spot USD/ZAR trades at 18.6441, nearly 2,500 pips above neutral levels. The rate has pierced resistance from the 50-EMA (18.5937) and bulls are looking for a move towards the 19.0 figure. Bears see May 21 low/round figure of 18.0290/18.0000 as their initial targets. The rate remains volatile in reaction to incoming political headlines.
- SAGB yields remain elevated across the curve, with 10-year breakeven inflation rate (last 6.94%) soaring to its highest point since the beginning of the month.
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