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USD/ZAR Eyes 16.00 as USD Strength Remains the Dominant Market Theme

SOUTH AFRICA
  • USD/ZAR trades -0.16% lower this morning, retracing early upside as selling pressure emerges in the BBDXY.
  • The cross traded choppily in yesterday's session, rising +0.75% as broad-based risk-off weighed on risk assets globally.
  • A surprise sweep for the DA in 5/8 key metros should come as a market-friendly result, but shows a sharp deterioration in ANC support, which will be a major concern for the party and for Ramaphosa ahead of the 2024 elections.
  • As a late hiker, ZAR remains vulnerable in bouts of risk aversion, but is relatively cushioned by its high real yield/carry profile.
  • USD strength remains prominent this week with PMI data today expected to reinforce signs of a robust recovery in the US.
  • Price action in USD/ZAR remains bullish with momentum still short of overbought levels with 16.00 the next major topside level.
  • Intraday Sup1: 15.7657, Sup2: 15.7145, Res1: 15.8472, Res2: 15.8780
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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