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Watching The 50-Day EMA


Bearish Focus


Updated Barclays/Bbg Extension Estimates for US


Late Session Selling


Consolidation Mode

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  • USD/ZAR trades a fraction firmer at the open, hovering a fraction below 14.60 and tracking price action in the BBDXY.
  • Yesterday's broadly risk-off session hit all high-beta currencies, and ZAR was no exception – snapping the downtrend held since 14 July.
  • While rioting risks have moderated substantially on the larger SANDF presence, police remain on high alert as rumours circulate about a second wave of looting targeting police weapons depots – which will need to be monitored closely as the situation in KZN has not fully stabilised.
  • Beyond this, the verdict on Zuma's corruption case postponement will be handed down today and seems unlikely to succeed.
  • On the covid front, case numbers have moderated significantly but are expected to rise again owing to the super spreader rioting events.
  • Interestingly, markets have priced in a 40% chance of a rate hike on Thursday, which is highly unlikely and could add to a dovish repricing in USD/ZAR post-meeting.
  • Our base case remains for a hold at this meeting and out to 1Q22 in the absence of further upside surprises in inflation in September-November, despite calls for early normalisation around that time among sell-side institutions (in-depth analysis in MNI SARB preview due 0900BST).
  • Intraday Sup1: 14,5113, Sup2: 14.4098, Res1: 14.6583, Res2: 14.7583