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ZAR Holds its Ground as Commodities Surge, But Risks Emerge on Russia Stance

  • USD/ZAR trades +0.45% higher this morning, mirroring price action in the BBDXY.
  • The cross fell -0.84% yesterday mostly against the grain in EM as SA’s terms of trade soared on rising commodity prices – notably palladium, which is trading at a 7.5 month high on mass shortage concerns with Russia responsible for 40% of global supply.
  • Calls from the US embassy to revise SA’s abstention on condemning Ukraine is a concern if NATO countries look to punish those turning a blind eye with trade restrictions.
  • Trade with Russia makes up a mere R15.7bn vs R1.131tn with NATO countries, making the position ill-advised if the West turns its focus on SA in the coming weeks.
  • ZAR has been notably resilient this week due to the bid in commodities only depreciating by 0.67% vs the USD w/w, while many of its peers have suffered notable weakness with the effects being most acute in CEE FX.
  • USD/ZAR remains pegged within the 15.00-15.60 range between its 200 & 100/50 dmas as risk sentiment continues to fluctuate.
  • Intraday Sup1: 15.1431, Sup2: 15.0603, Res1: 15.2911, Res2: 15.3663
  • Citi SA Terms of Trade

MNI London Bureau | +44 020-3983-7894 |
MNI London Bureau | +44 020-3983-7894 |

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