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USD/ZAR Eyes 15.00 as Dovish SARB Wrongfoots Hawks

SOUTH AFRICA
  • USD/ZAR opens slightly firmer, tracking upside in USD/CNH for the most part.
  • This cross moved +3.17% higher last week as the SARB turned more dovish on the inflation outlook following recent unrest, wrongfooting a market which had pre-emptively priced in a more hawkish approach from the central bank.
  • Friday's price action saw a notable close above the 200dma, opening up scope for a continuation towards 15.00-15.50 as markets boost expectations for a firmer USD in the coming weeks.
  • A reduction in restrictions has done very little to buoy ZAR sentiment, with economists having mixed opinions about the fiscal/unemployment risks surrounding the reinstatement of the R350 basic income grant.
  • Domestically, we see PPI and trade balance data towards the end of the week.
  • Intraday Sup1: 14.7583, Sup2: 14.6577, Res1: 15.0309, 15.2031
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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