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USD/ZAR Continues to Pressure its 200dma, Despite Softening Commodity Prices

  • USD/ZAR trades +0.20% higher this morning, treading water around the open amid mixed global risk conditions.
  • ZAR gained +20.3% vs the greenback, +2.33% vs the EUR & 3.32% vs GBP as rising commodity prices continued to support the currency.
  • Precious metal prices have come off sharply this morning alongside oil in line with more positive sentiment RE Ukraine-Russia talks, with negotiators getting closer to some sort of agreement in the coming days.
  • SA’s terms of trade have fallen sharply from last week’s highs, but still remain elevated around the 2021 highs – keeping ZAR supported in the interim.
  • This week’s focus will be on the Ukraine crisis, retail sales and the first Fed hike - expected at +25bp in line with its well-telegraphed forward guidance.
  • Although load-shedding has stopped, the grid remains vulnerable to more capacity shortfalls, and the energy outlook for 2022 remains gloomy for SA.
  • USD/ZAR has stalled around its 200dma & 15.00, with a close below 14.9133 opening up a move towards 14.75-14.50. Meanwhile, failure to break the 200dma will keep the cross in its range between the 100 & 200dmas in the 15.00-15.50 zone.
  • Intraday Sup1: 15.9935, Sup2: 14.9133, Res1: 15.1431, Res2: 15.2155
  • Citi SA Terms of Trade Index

MNI London Bureau | +44 020-3983-7894 |
MNI London Bureau | +44 020-3983-7894 |

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