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USD/ZAR Eases Amid Greenback Sell-Off, SAGBs Remain Weaker

ZAR

Spot USD/ZAR last deals at 18.4927, almost 1,300 pips lower on the day, with the pair recently driven by gyrations in the BBDXY Index. The greenback's dip in reaction to weaker-than-expected US JOLTS and Conf. Board Consumer Confidence data has applied fresh pressure to USD/ZAR, but earlier session lows have remained intact so far.

  • SAGB yields are slightly higher, curve has steepened. Deutsche Bank wrote that in their view "SAGBs are overpricing South Africa's challenges." They base this assessment on the "still relatively cheap fixed-income valuation compared to underlying drivers, very light foreign positioning" and easing inflation pressure. Today's auction for ZAR3.9bn of SAGBs attracted demand for ZAR6.77bn, down from ZAR8.67bn last week.
  • Eskom announced that further generator outages forced it to escalate rolling blackouts. The utility will now move between Stage 2 and Stage 4 loadshedding daily until further notice.

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