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USDZAR at Lowest Level Since August as Gold Rallies

ZAR
ZAR is trading 1.00% lower against the dollar on the day at the time of typing, putting ZAR as one of the strongest CEEMEA performers today, with only HUF outperforming it (USDHUF +1.27%; USDPLN +0.77%). The currency enters 2023 with the tailwind of China reopening as well as a lower political risk premium after December's ANC conference resulted in a stronger mandate for President Ramaphosa, with focus now turning to the party's approach to onboarding up to two-thirds of Eskom debt as well as the ongoing load-shedding crisis.

  • The USDZAR moves today follow gold price action, which has started the year on a firm note, clearing resistance and resuming its uptrend. The yellow metal is currently trading at 1858.70, its highest level since June.
  • The key 16.8980 short-term USDZAR resistance has been pierced, reinstating the bearish theme. This has opened up the next resistance to watch at 16.7102, the Aug 25 low. Similarly, EURZAR is trading 0.45% lower, with the pair trading close to its Dec 1 lows.
  • Domestically, today marks the expected stepdown in petrol and diesel prices, with no major data releases on the docket until Thursday’s December PMI. Domestic bonds are trading relatively flat on the day. Looking ahead, the ISM Manufacturing release will take focus today, before Friday’s NFPs.

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