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USD/ZAR Teeters Below 16.00 As Markets Assess Implications for SARB in July

SOUTH AFRICA
  • USD/ZAR trades +0.25% higher this morning, treading water just below the 16.00 handle on the back of USD weakness in yesterday’s session.
  • 1x4 FRA-Jiba3m spreads have softened slightly in the lead-up to CPI today – dipping from +48bp to +42.5bp in line with USD/ZAR coming off its highs.
  • An upside surprise or flat print today would reinforce the case for a +50bp hike, while a notable downside surprise would be needed to derail the 50bp consensus for this week.
  • The focus from here is more on the July decision, however. Retail sales data is also due today and expected to continue to slide as high frequency activity data ebbs with the rise in inflation and weakening in business/consumer sentiment.
  • Intraday Sup1: 15.8784, Sup2: 15.7331, Res1: 16.0331, Res2: 16.1331
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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