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ZAR: Rand Garners Strength, Tops EMEA Pile

ZAR
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USD/ZAR comes under pressure, swinging into a weekly loss. Topside momentum behind the greenback seems to have petered out for now, with the BBDXY catching breath after a rally to new cyclical highs, which may have facilitated the rate's downtick. When this is being typed, USD/ZAR trades at 17.4342, almost 1,000 pips lower on the session, with bears looking for further losses towards Sep 30 low/round figure of 17.0356/17.0000. Bulls eye the 50-EMA at 17.7014 for initial resistance.

  • SARB Governor Lesetja Kganyago struck some optimistic notes in his testimony to lawmakers yesterday, noting that inflation may fall below +4% Y/Y in the next couple of months, while more generally the decline in inflation will open up space for the central bank to loosen monetary policy.
  • SAGB yields have faltered this morning, even as US TSy yields still hover above neutral levels. South Africa's 10-year breakeven inflation rate ticks lower for the fifth consecutive day, landing at 5.37%. This comes ahead of today's linkers auction, which will see the National Treasury offer ZAR1bn of bonds maturing in 2031, 2038 and 2046.
  • The aggregate BBG Commodity Index operates marginally above neutral levels, after unwinding its initial gains. The precious metals subindex is 0.6% higher on the session, with gold trading ~$12.9/oz. better off.
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USD/ZAR comes under pressure, swinging into a weekly loss. Topside momentum behind the greenback seems to have petered out for now, with the BBDXY catching breath after a rally to new cyclical highs, which may have facilitated the rate's downtick. When this is being typed, USD/ZAR trades at 17.4342, almost 1,000 pips lower on the session, with bears looking for further losses towards Sep 30 low/round figure of 17.0356/17.0000. Bulls eye the 50-EMA at 17.7014 for initial resistance.

  • SARB Governor Lesetja Kganyago struck some optimistic notes in his testimony to lawmakers yesterday, noting that inflation may fall below +4% Y/Y in the next couple of months, while more generally the decline in inflation will open up space for the central bank to loosen monetary policy.
  • SAGB yields have faltered this morning, even as US TSy yields still hover above neutral levels. South Africa's 10-year breakeven inflation rate ticks lower for the fifth consecutive day, landing at 5.37%. This comes ahead of today's linkers auction, which will see the National Treasury offer ZAR1bn of bonds maturing in 2031, 2038 and 2046.
  • The aggregate BBG Commodity Index operates marginally above neutral levels, after unwinding its initial gains. The precious metals subindex is 0.6% higher on the session, with gold trading ~$12.9/oz. better off.