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ZAR Inflows Notch Up Post-Yellen Speech; SARB In Focus

SOUTH AFRICA
  • USD/ZAR trading lower around 14.90 on the back of Yellen's speech and a weaker Greenback.
  • Downside in USD/CNY & upbeat commodities (gold +0.79%, platinum +1.03%) providing support to ZAR asset inflows.
  • CPI in focus today ahead of tomorrow's SARB with expectations for a moderation towards the lower band of the inflation target (3-6%) at 3.0-3.1% for December.
  • Disinflation and growth concerns adding weight to calls for a 25bp cut.
  • However, a broadly hawkish MPC adamant about limited marginal stimulatory impact from rate cuts in the absence of structural reforms may see the SARB opt to keep its powder dry until deeper pressures materialise.
  • Reinforced carry through a hold should support more ZAR inflows on the hunt for yield in EM.
  • Sup1: 14.8189, Sup2: 14.7093, Res1: 15.00, Res2: 15.0718
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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