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ZAR Brushes off China GDP, Dials in on SARB

SOUTH AFRICA
  • USD/ZAR following yields higher as bond outflows resume, despite an upbeat Q420 GDP print from China.
  • ZAR broadly tracking USD/CNY as the weakening trend resumes.
  • Commodities slightly firmer on a flat Greenback.
  • Focus this week on the SARB, which is expected to hold rates steady - despite some calling for a 25bp cut on reduced growth forecasts.
  • Gov Kganyago will likely reiterate the risks of a steeper curve ahead of the Feb budget and that average inflation remains at the midpoint of the range, limiting the effectiveness and scope for cuts in the absence of Govt-driven structural reform/fiscal improvements.
  • Concerns about tax hikes will likely become the next key debate as the budget draws nearer.
  • Res1: 15.3174, Res2: 15.40, Sup1: 15.2116, Sup2: 15.1105
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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