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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
SOUTH AFRICA
- In addition to the USD consolidation, the Chinese Yuan weakness has been driving the ZAR higher in the past ten days; the rand is among the top EM performers since the USDCNY trend reversed in mid-May, up nearly 3% against the greenback.
- The chart below shows that the USDCNY vs. USDZAR correlations (daily returns) have been surging in recent weeks, with the 3M correl breaking above the 0.5 level to a 4-Year high.
- However, the lack of visibility and convictions in markets could limit the upside gains on ZAR; uncertainty remains elevated and therefore could lead to a new global ‘risk off’ environment, which is usually negative for the rand.
- USDZAR has been trending lower today, braking below its 15.6740 support (23.6% Fibo retracement of the 13.4320 – 16.3670 range) and gradually approaching its next ST support at 15.50.
- Key level to watch on the downside stands at 15.2460 (38.2% Fibo, 200DMA).
- On the topside, ST resistance stands at 16.
Source: Bloomberg/MNI
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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