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ZAR Brushes Off Eskom Concerns, But Risks Brew Over Reserve Depletion

SOUTH AFRICA
  • USD/ZAR trades -0.03% lower this morning, hovering around 14.90 support on the back of early weakness in the BBDXY.
  • The cross fell -0.88% yesterday as ZAR continues to be one of the top EM outperformers in November amid more favourable global risk conditions and a softer greenback.
  • ZAR has brushed off Eskom risks thus far, but concerns are brewing over the severity of its reserve depletion and the cloudier medium-term outlook for energy stability in SA in the absence of any near-term solutions.
  • SA's MTBPS is another ZAR positive factor, but USD/ZAR appears well-supported in the 14.78-14.56 zone with multiple moving averages providing dynamic support.
  • US PPI and CPI will be eyed today and tomorrow for more clues on the veracity of US pricing dynamics and could precipitate some near-term volatility across EMFX.
  • Nevertheless, ZAR remains a go to currency during bouts of risk-on with RSI momentum now in positive territory.
  • Intraday Sup1: 14.8615, sup2: 14.7866, Res1: 14.9847, Res2: 15.1089
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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