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USD/ZAR Jumps 1.68% as Russia Risks Escalate, Markets Price More Hawkish SARB

  • USD/ZAR trades +1.68% higher this morning on the back Western sanctions on the CBR’s ability to use its foreign reserves held abroad (~40% of $630bn) forcing the bank to hike interest rates to 20% from 9.50% and impose 80% mandatory FX sales for local firms.
  • Oil prices have surged +4.25% this morning, adding risks for SA on the inflation front as a net importer. 9x12 FRA-Jibar3m spreads have risen from +142-170bp since last Wednesday as the crisis has escalated.
  • USD/ZAR is pressuring its 100 & 50dmas at 15.43, with a breakout higher opening 15.75-16.00 to the topside. Momentum has also shifted to bullish territory on the RSI, having crossed the 50 mark to the upside.
  • A close above 15.50 would be a bullish development. USD/ZAR 1m risk reversals have also ticked higher – moving back to August 2021 levels.
  • Intraday Sup1: 13.3663, Sup2: 15.2633, Res1: 15.49-2, Res2: 15.6032
  • USD/ZAR 1m RRs

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

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