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USD/ZAR Choppy Below 14.50 as Political Infighting Escalates

SOUTH AFRICA
  • USD/ZAR trades lower at the open in line with early selling pressure on the BBDXY.
  • The cross pulled back sharply from Friday's test of the 14.50 level, but remains choppy as political/factional tensions escalate within the ANC over Zuma's jail sentence.
  • The next three days will be crucial as the police deadline for Zuma's arrest expires and the NEC holds a special meeting on the matter today.
  • While an order to arrest Zuma would spark political instability in the short-term (Especially in KZN region), it represents a positive shift for both SA and Ramaphosa's anti-graft campaign.
  • Magashule also continues to defy the ANC by speaking to Zuma supporters and refusing to leave the ANC, which may bring the NEC closer to ordering his expulsion.
  • Additionally, strike risks continue to escalate with unions due to respond to a marginally sweeter wage deal from Govt.
  • Nevertheless, the latest offers come in way below union demands and will most likely be rejected.
  • Intraday Sup1: 14.1421, Sup2: 14.0768, Res1: 14.3667, Res2: 14.4771
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com

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