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FR Business Climate Dipped Slightly in July


Attention turns to the ECB


Bears Remain In Charge


Watching Short-Term Support

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  • USD/ZAR trades -0.38% lower this morning, broadly in line with weakness in the BBDXY and firmer risks sentiment out of APAC.
  • The cross pulled back from 14.75 resistance in yesterday's session as upbeat US earnings buoyed global risk sentiment against burgeoning concerns surrounding the Delta variant that has rattled global markets this week.
  • Today's focus, however, will be on the SARB which is expected to keep rates unchanged at 3.5%.
  • Relatively contained inflation, high unemployment and concerns over risks to the recovery narrative from social unrest and covid should see the Governor keep guidance carefully consistent and marginally dovish for fear of spooking markets.
  • Despite recent sell-side calls for expedited normalisation in November, we stick with our base case of unchanged rates until 1Q22, given the muted aggregate demand impulse.
  • An unwind in relatively hawkish expectations for this meeting could see a minor dovish repricing post-meeting with USD/ZAR trading higher.
  • Intraday Sup1: 14.5042, SUP2: 14.4547, Res1: 14.6577, Res2: 14.7583