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USD/ZAR Flirts With 200dma as Markets Digest New Cabinet Appointments

SOUTH AFRICA
  • USD/ZAR trades +0.32% at the open, continuing to drift slightly higher following last week's Cabinet reshuffle which unwound a strong ZAR rally at the start of the week as the hunt for yield returned to EM FX.
  • The cross stalled out around 14.70 on Friday, managing to close below the 200dma which will be watched closely this week for signs of a continuation higher.
  • Markets seem to have received the new FinMin with cautious positivity, while the rest of the reshuffle has been a relative non-event aimed to political positioning, rather than a shift in policy trajectory for Govt.
  • From here, markets will continue to digest the reshuffle, but the impact from the initial shock may wane in the next few days as the market becomes more comfortable with the changes.
  • For now, 15.00 looks like robust resistance and a return to risk-on and hunt for yield should see ZAR favoured, given strong fundamentals.
  • Markets will parse a swathe of manufacturing and mining data this week, but most of the focus will be on international factors and the aftermath of the Cabinet reshuffle.
  • Intraday Sup1: 14.6582, Sup2: 14.5753, Res1: 14.7583, Res2: 14.8668
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com
Africa Market NewsHomepageTopicsEM BulletBulletEmerging Market News
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com
Africa Market NewsHomepageTopicsEM BulletBulletEmerging Market News

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