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USD/ZAR Tests 50% Fib at 14.9846, Local Politics Heating Up

SOUTH AFRICA
  • USD/ZAR continues to track USD/CNH lower with the USD remaining subdued following tepid prints for US CPI and 10Y auction demand.
  • USD/ZAR is now approaching the 15.00 handle again, having clawed back almost 50% of the UST-induced correction (50% fib at 14.9846).
  • We have a raft of data on the agenda for today – mostly looking weaker than prior prints:
    • Current Acc exp at R213bn vs R297bn prior
    • Mining Production y/y at -3.0% vs 0.1% prior & 0.4% m/m vs 0.5% prior
    • Manufacturing production y/y at -1.1% vs 1.8% prior & m/m at -0.7% vs -0.1% prior
  • A turnaround in commodity prices on the back of a softer USD should also help buoy ZAR: gold +0.58%, platinum +1.59%. As noted yesterday, $1,100 level acting as strong support.
  • Local politics is definitely heating up with factions becoming more deeply divided over Zuma, the Public Protector & Magashule as they battle Ramaphosa for power in the ANC.
  • Bid in rates also broadly ZAR supportive, provided UST yields continue to compress.
  • Intraday sup1: 14.9846, Sup2: 14.9078, Res1: 15.710, Res2: 15.2116
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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