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USDZAR Pares Most of Last Week’s Gains, Gold Provides Additional Impetus to ZAR

ZAR
USDZAR losses sit just above 2% at typing amid the impressive rally across EM FX on the back of the US data. The pair has now erased over half of last week’s gains with a ~1% bounce in gold providing an additional impetus to commodity-tied currencies as markets price in more, and faster, Fed rate cuts next year. Meeting-dated OIS contracts now price a cumulative 50bps of cuts for the Jul'24 meeting. Price action places the rand at the top of the EMEA pile.
  • Resistance at the 50-day EMA held firm on two instances this week, strengthening the bearish theme in USDZAR. If today’s move lower can be sustained, the 18.00 handle and 17.9434, 76.4% of the Jul 27 - Oct 6 bull phase, may be exposed.

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