ZAR: USD/ZAR Targets Close Below Bear Trigger

USDZAR has extended its losing streak to ten consecutive sessions, reaching its lowest level since July 2023 in the process. The move lower today has largely been a function of dollar weakness, with the DXY trading close to its YTD lows ahead of Fed Chair Powell’s speech at the Jackson Hole Symposium Friday – the key risk event across markets this week.

• In South Africa, CPI figures for July will cross Wednesday morning. A slight moderation in the headline figure, from +5.1% Y/Y to +4.8%, is expected. Analysts anticipate that weaker fuel prices will drive the headline figure lower, with prices seen moderating further in the coming months on the back of favourable base effects. The SARB meet next on September 19, one day after the Fed’s rate decision.
• For USDZAR, the move lower over the past few sessions has resulted in the break of key support and a bear trigger at 17.8689, the Jun 21 low, though the pair is yet to close below this level. The breach confirms a resumption of the downtrend that started in April and paves the way for an extension towards 17.4193, the Jul 27 low and the next key support.
• Despite rand outperformance in the EMEA space, the currency has still registered losses against the Japanese yen owing to the latter’s solid rally today. ZARJPY sits around 0.3% lower at typing, but remains well-contained within last week’s ranges and still ~8% above the August lows.