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ZAR Shines Amid EM Disarray, but 14.50 vs the USD Remains Sticky

SOUTH AFRICA
  • USD/ZAR opens higher on a firmer USD and continues to diverge somewhat from CNH price action.
  • 14.50 proved to be sticky once again last week as choppy USD trading kept the pair from moving lower despite firm bond markets.
  • Focus this week remains on brewing political risks as rumours of a Cabinet reshuffle become louder.
  • Limited newsflow over the weekend means SA markets will likely track global risk sentiment & $-side developments ahead of US CPI tomorrow until more concrete political drivers surface this week.
  • At the moment, all the cards are coming up in Ramaphosa's favour as he slowly cements his grip on power in the ANC.
  • Both retail sales and mining production data expected to improve this week. Across the sell-side, ZAR remains a brightspot vs peers RUB & TRY, suffering from idiosyncratic risk factors.
  • Intraday Sup1: 14.5775, Sup2: 14.4904, Res1: 14.6790, Res2: 14.7158
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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