Spot USD/ZAR Remains Afloat Ahead Of Thursday's SARB Announcement

Spot USD/ZAR oscillates within a familiar range as the market gears up for tomorrow's monetary policy decision from the local central bank. The rate last changes hands at ZAR17.2056, up ~75 pips on the session.

• Bloomberg reported that Eskom is looking into the consequences of the recent expiry of South Africa's pact with the U.S. that allowed it to import nuclear fuel components used in the Koeberg power plant, parts of which are currently offline for planned maintenance. While the energy utility said it doesn't expect nuclear fuel shortages in the near future, South Africa will likely seek to handle the issue urgently, given its ongoing power crisis.
• Uncertainty about tomorrow's SARB decision has not been reflected in the volatility curve, with the overnight tenor staying at fairly contained levels despite a modest uptick today.
• The FRA 1x4 vs. 3-Month JIBAR spread has compressed since the beginning of the year and last sits at ~21bp, suggesting that the market has priced out some tightening that had been expected earlier.