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USD/ZAR Pulls Back from 14.50 as Markets Mull Hawkish SARB MPC Split

SOUTH AFRICA
  • USD/ZAR trades +0.30% higher this morning, trimming some of yesterday’s post-SARB move to the downside.
  • The cross fell -1.59% following a hawkish pivot from the MPC that saw a +25bp hike delivered by just a narrow margin.
  • Both inflation and growth forecasts were revised higher, but some analysts noted that the impending rise in fuel & food costs may make its CPI predictions (FY22 avg 5.8% y/y) too optimistic.
  • Governor Kganyago acknowledged uncertainties stemming from the Ukraine crisis, and pointed to Fed tightening as two factors that could present risks to the outlook.
  • Here, moves from the Fed to hike in 50bp clips risk seeing the MPC split move in favour of a faster pace of tightening at the May meeting – although this will be a close call and ultimately data-dependent.
  • USD/ZAR maintained its downside momentum, briefly dipping below 14.50 this morning.
  • Price action on the daily chart is clos to oversold territory on the RSI, with the next key downside levels coming in at 14.4158, 14.2751 & 14.1536.
  • Intraday Sup1: 14.4848, Sup2: 14.4158, Res1: 14.6394, Res2: 14.6759
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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