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ZAR: USDZAR Reverses Earlier Gains, JPM Recommend Buying ZAR vs. COP, CLP

ZAR

USDZAR has reversed the bulk of its earlier gains, but still remains 0.2% in the green after trading as much as 0.6% higher at the start of the session. The general risk-off tone across markets as well as a substantial dip in spot gold (-1.7%) and silver (-2.4%) are all contributing to rand weakness today, though the slow recovery in equities throughout the session may have helped the local currency recover off its worst levels of the day.

  • JP Morgan have noted that they have turned constructive on ZAR after the elections based on expectations for an inflection point in key fundamentals, including potential growth and the fiscal deficit and a slow and cautious central bank easing cycle. They recommended buying the rand against a basket of the Colombian peso and the Chilean peso (Entry point: 100, target: 110, ZAR/COP spot ref: 221.68, ZAR/CLP spot ref: 51.40).

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