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USD/ZAR Gets Choppy as Coalition Talks Kick Off

SOUTH AFRICA
  • USD/ZAR trades -0.23% lower this morning , tracking early weakness in the BBDXY.
  • The cross closed yesterday's session +0.13% higher after occupying a choppy range between 15.35-15.50 as election results filtered through.
  • With over 65% of the vote counted an ANC decline below 50% is almost certain, making today all about furious coalition-making.
  • While the ANC seems keen to avoid partnering with the EFF on ideological clashes, it seems the most likely outcome in a number of metros with the DA and ActionSA a likely pair in Gauteng.
  • As noted yesterday, the prospect of ANC-EFF coalitions brings in potential for more left-leaning policies and difficulties for Rasmaphosa's market-friendly reform agenda.
  • News of climate financing is a positive development, given the poor energy security outlook - but will depend on how effectively the funding is used.
  • International focus will be on the FOMC later this afternoon with scope for a hawkish surprise on discussion of inflation and rates lift off in 2022.
  • Intraday Sup1: 15.3532, Sup2: 15.3281, Res1: 15.473, Res2: 15.5427
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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