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ZAR: USDZAR Trading at 19-Month Low Post-US Data

ZAR
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Post-data greenback weakness prompts an acceleration of losses for USDZAR (-0.55%), which is trading at its lowest since February 2023. Month-to-date spot gains for the rand vs. the US dollar now stand at an impressive +4.3%, with the 14-day RSI for USDZAR seen hitting its lowest since December 2020 – and now well into ‘oversold’ territory.

  • Bank of America strategists maintain their view of ZAR strength into 2025, driven principally by expectations of USD weakness as the labour market cools and the start of the Fed’s cutting cycle. However, they add that in the short term, the global backdrop as the market shifts focus to hard landing and trade war risks are likely to drive the rand weaker. They therefore forecast USDZAR at 17.80 at year-end and at 17.50 in 1Q 2025.
  • Meanwhile, Nedbank say South Africa’s markets are reflecting a level of economic optimism about the country. They say the rand’s fair value is around 16.50 in the medium term.
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Post-data greenback weakness prompts an acceleration of losses for USDZAR (-0.55%), which is trading at its lowest since February 2023. Month-to-date spot gains for the rand vs. the US dollar now stand at an impressive +4.3%, with the 14-day RSI for USDZAR seen hitting its lowest since December 2020 – and now well into ‘oversold’ territory.

  • Bank of America strategists maintain their view of ZAR strength into 2025, driven principally by expectations of USD weakness as the labour market cools and the start of the Fed’s cutting cycle. However, they add that in the short term, the global backdrop as the market shifts focus to hard landing and trade war risks are likely to drive the rand weaker. They therefore forecast USDZAR at 17.80 at year-end and at 17.50 in 1Q 2025.
  • Meanwhile, Nedbank say South Africa’s markets are reflecting a level of economic optimism about the country. They say the rand’s fair value is around 16.50 in the medium term.