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USD/ZAR Eases Off After Rejecting Trendline Support-Turned-Resistance

ZAR

Trendline support-turned-resistance capped gains in spot USD/ZAR yesterday as the Rand took a hit from the surprise OPEC+ output cut and a weak outturn for South Africa's Absa Manufacturing PMI. The rate has lost steam this morning and last trades at ZAR17.7787, down 705 pips on the session.

  • From a technical point of view, bears look for losses past Mar 31 low of ZAR17.6993 and towards Feb 14 low of ZAR17.6431. Conversely, bulls eye resistance from former trendline support intersecting at ZAR17.9635.
  • The commodity complex has found poise and the composite BBG Commodity Index sits ~0.3% above neutral levels. The precious metals subindex has lodged only marginal gains.
  • Local-currency bond yields have ticked higher and last sit 1.6-2.4bp, curve runs slightly flatter. South Africa's 10-year breakeven inflation rate is 6.23%.

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