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USD/ZAR Teeters on 16.00, UK Redlist & Covid Restrictions In Focus

SOUTH AFRICA
  • USD/ZAR trades +0.17% higher this morning, hovering above the 16.00 handle as weaker sentiment filters through from the APAC session.
  • The cross remained choppy in yesterday’s session, closing +0.43% higher as the BBDXY marched higher ahead of tomorrow’s FOMC.
  • Today’s focus will be on coronavirus restrictions and the UK’s travel redlist as SA’s tourism & hospitality industries remain under severe stress ahead of peak tourist season.
  • Removal from the redlist and no restrictions would likely be a massive boon for SA and a signal of confidence against the Omicron variant, which has been proven milder than expected thus far.
  • USD/ZAR remains mostly rangebound in the 15.80-16.20 zone for now, awaiting fresh catalysts to determine its near-term direction.
  • Expectations for a more hawkish FOMC on a doubled taper speed and signs of 2-3 hikes in the 2022 dot plot risks adding more bullish drivers to USD/ZAR in the near-term.
  • Intraday Sup1: 15.9366, Sup2: 15.8726, Res1: 16.1044, Res2: 16.2383
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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