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ZAR Vulnerable to Real Yields, But Being Watched Closely By Sell-Side

SOUTH AFRICA
  • USD/ZAR drifts back below 15.00 after a brief trip up to major channel resistance at 15.21 - but failed to break the level.
  • Sell-side research shows ZAR remains extremely vulnerable to rising UST yields, but still holds potential for a strong rally, once UST upside/volatility moderates.
  • Lifting of restrictions to level one should benefit the hospitality sector through later curfew, but on the whole no major change on daily life.
  • Local indices and commodities benefitting from a respite in $ buying activity, alongside most EMFX & commodity currencies.
  • Focus this week Public Protector's report which could see escalated pressure for her to leave office - which would be deemed a net positive for the Ramaphosa faction of the ANC.
  • More favourable risk sentiment to benefit ZAR, but this is largely contingent on volatility is UST Markets.
  • Sup1: 14.9207, Sup2: 14.8147, Res1: 15.0710, Res2: 15.1796
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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