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USD/ZAR Falls -1% as Markets Question Central Bank Policy Over Omicron Variant

SOUTH AFRICA
  • USD/ZAR trades -1.08% lower this morning, retracing some of Friday's covid-induced move towards 16.40 as risk sentiment recovers tentatively.
  • The primary focus remains on the Omicron variant and what it could mean for global growth, central bank policy and SA's tourism season. Ramaphosa called on developed nations to reverse travel bans, but this seems a hard-sell at this early stage.
  • On the data front, unemployment, trade balance & PMI metrics will be monitored, while US ISM & NFP numbers are the big-ticket items on the agenda this week.
  • The cross will likely remain at the mercy of Fed expectations and variant developments driving broad risk sentiment this week – so we can likely expect some volatility in the EM high-beta space.
  • USD/ZAR reached overbought on the RSI on Friday's session, dropping just short of 16.50 - but is well supported around the 15.93-15.80 zone at present.
  • Intraday Sup1: 16.0373, Sup2: 15.9306, Res1: 16.2383, Res2: 16.3668
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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