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ZAR on the Front Foot As Magashule Gets His Marching Orders

SOUTH AFRICA
  • ZAR trades on the front foot this morning on the back of early selling pressure on the greenback.
  • The official suspension of ANC SG Magashule saw ZAR outperform its CEMEA peers in yesterday's session – gaining some traction against the USD and comprehensively rejecting the 14.50 handle.
  • Local politics and wage disputes are likely to be the key local focus going forward, with national strike risks escalating and local factional politics heating up.
  • We may see more desperate moves from the RET faction and Magashule in the coming days as he tries to delay/derail suspensions proceedings ahead of the weekend NEC.
  • However, Ramaphosa and the top 6 have been firm in their resolutions and are unlikely to waver.
  • Rising covid cases are a tail risk to monitor as experts warn about a third wave. Strong ZAR fundamentals and attractive vol-adjusted carry will support the currency in bouts of risk-on.
  • Intraday Sup1: 14.2777, Sup2: 14.1879, Res1: 14.3833, Res2: 14.4474
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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