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USD/ZAR Hovers Below 15.00 as Markets Align More Closely With +25bp SARB Hike

  • USD/ZAR trades +0.10% higher this morning, tracking choppy price action in the BBDXY. The cross closed yesterday’s session mostly flat and a fraction below the 15.00 handle as negotiators poured cold water on progress in Ukraine talks.
  • US equities, however, managed to end the session higher post-FOMC – supporting global risk sentiment and ZAR.
  • SA’s terms of trade have plummeted in recent days, but ZAR has remained resilient with the Greenback retreating since Tuesday.
  • Markets are currently leaning more towards a +25bp hike in next week’s SARB, with the exogenous nature of the oil shock being something the SARB cannot counter with tightening policy.
  • ZAR strength has also neutralised a lot of FX passthrough, but could weaken slightly post-decision if the markets deem the MPC’s stance to be too dovish in the face of rising average inflation forecasts.
  • Intraday Sup1: 14.8548, Sup2: 14.7583, Res1: 15.0475 (200dma), Res2: 15.1431
  • 1x4 FRA-Jiba3m Spreads

MNI London Bureau | +44 020-3983-7894 |
MNI London Bureau | +44 020-3983-7894 |

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