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USD/ZAR Hovers Above the 15.00 Handle as Markets Eye Potential CPI Peak in Jan

SOUTH AFRICA
  • USD/ZAR trades -0.34% lower this morning, mirroring choppy price action in the BBDXY.
  • The cross stalled just shy of Thursday’s lows on Friday as global risk sentiment soured over Russia-Ukraine concerns with ZAR ending +1.52% firmer vs the USD w/w.
  • Ramphosa’s SONA will be under the microscope this week with parliament set to question the president on details for his reform plans with the party facing major challenges in 2022.
  • CPI data will be monitored this week with markets anticipating a potential peak in inflation in line with SARB forecasts.
  • Here, any downside prints could see markets trim rate hike bets following the prior SARB meeting that came out less hawkish than expected.
  • Russia-Ukraine tensions and RUB weakness have seemed to drive risk flows to ZAR, which may keep it slightly more resilient in the event of more RUB weakness.
  • Terms of trade remain solid at current levels, but markets will be keeping an eye on US data this week for USD-side drivers.
  • Intraday Sup1: 15.0492, Sup2: 14.9815, Res1: 15.2963, Res2: 15.3914
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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