USD/ZAR Tests 18.00, Rand Tops EMEA Pile

Spot USD/ZAR pierced support from Jun 16 low of 18.1250 yesterday before staging a more convincing breach of that level today as selling pressure remains in place. The rand benefitted from a weaker than expected US CPI figures yesterday, as participants reassessed the outlook for Fed monetary policy.

• USD/ZAR last trades at 18.0050, around 1,300 pips lower on the day, with the round figure of 18.00 providing support so far. The next bearish target is 17.6993, the low print of Mar 31. Conversely, bulls look for gains towards Jul 7 high of 19.1533.
• SAGB yields have eased across the curve, with 10-year breakeven inflation rate (last 6.41%) extending its sharp drop to fresh three-month lows. The BBG Commodity Index sits ~0.3% higher on the day, the precious metals gauge is also ~0.3% firmer.
• Pretoria deployed a high-level government mission to the US to discuss South Africa's preferential trade status and the upcoming AGOA summit. A team of ministers will seek to persuade US officials that South Africa should keep its trade benefits despite questions surrounding its non-aligned stance on the war in Ukraine.
• South African May mining data will hit the wires at 10:30BST/11:30SAST.