USD/ZAR Punches Through Bull Trigger With Rand Hit By Double-Whammy Of GDP & Fedspeak

Spot USD/ZAR has advanced this morning, building on its gains yesterday which allowed for a clean break above key resistance from Oct 13 high of ZAR18.5815, suggesting potential for a further rally. The pair last deals at ZAR18.6423, up ~1,340 pips or ~0.7% on the session, after topping out at ZAR18.7192.

• Bulls now see a clear path towards the round figure of ZAR19 which has remained intact since April 2020. On the flip side, the initial near-term support is provided by the 20-EMA, which kicks in at ZAR18.1406.
• USD/ZAR implied volatilities have crept higher today, with one-week tenor hitting its best levels since mid-February and one-month tenor rising to a new monthly peak.
• The confluence of bleak GDP data released out of South Africa and surprisingly hawkish comments from Fed Chair Powell yesterday applied pressure to the Rand. Domestic growth concerns resurfaced as SARB Gov Kganyago dubbed the latest GDP outturn "much weaker" than expected.
• Local-currency bond yields are marginally higher across the curve after trimming initial gains. The FTSE/JSE Africa All Share Index has tumbled ~1.3% so far.
• BER Business Confidence will cross the wires shortly.