ZAR: Rand Under Pressure Amid Underwhelming Chinese Data, Firmer Greenback

Spot USD/ZAR trades at 18.0675, more than 1,100 pips higher on the day, mostly on the back of external drivers. Bulls look for gains towards Jul 2 high of 18.6627, with bears setting their sights on Jun 21 low of 17.8689.

• China's Q2 GDP released overnight missed expectations, while June economic activity data were a mixed bag compared with forecasts, but retail sales rose at the slowest pace since December 2022. Overall, the data testified to continued difficulties with reigniting domestic demand to desired levels in Asia's largest economy and the top buyer of South African commodities.
• US political risk has lent support to the greenback, with the BBDXY Index adding 0.15% in a rebound from recent cycle lows, as the dollar outperforms its G10 peers. A failed assassination attempt targeting Donald Trump is believed to have boosted his chance for winning the US presidential race.
• The aggregate BBG Commodity Index has shed 0.7%, with precious metals sitting 0.5% below neutral levels.
• SAGB yields are higher across the curve, with South Africa's 10-year breakeven inflation rate creeping higher to 5.71%.
• The local economic docket is empty today, with the focus turning to Thursday's SARB rate decision and a policy speech from President Cyril Ramaphosa.