USDZAR Trades Just Below 19.00 With Attention Turning to This Week’s Budget

The rand continues to underperform the majority of its EMEA peers as we approach the end of the European session, with USDZAR 0.55% in the green. The pair has failed to meaningfully break above the 19.00 handle today, despite making a brief test above that level earlier in the session.

• The return of Chinese market participants post-LNY and strength in major mainland equity indices has been unable to offer the rand any reprieve today. Meanwhile, both the DXY index and spot gold sit close to unchanged on the day.
• For bulls, sights are on 19.2180, the Jan 22 high. Clearance of this level would confirm a resumption of the uptrend and open 19.6399, the Oct 6 ‘23 high. Meanwhile, initial support to watch is at 18.8004, the Feb 13 low. A clear break of this level would be a bearish development that could expose 18.5578.
• Looking ahead, the key event this week is Finance Minister Godongwana's budget speech scheduled for Wednesday, with the main fiscal deficit targets broadly expected to be unchanged compared to last year’s MTBPS. CPI data for January will also cross on Wednesday (Est: +5.4% y/y; Prior: +5.1%).