Free Trial

ZAR Weakens on Less Hawkish SARB, Lower Terms of Trade

SOUTH AFRICA
  • USD/ZAR trades +0.31% higher this morning, tracking early upside in the BBDXY.
  • The cross closed yesterday’s session 0.80% higher following the SARB meeting, which analysts argued was less hawkish than expected with slightly smaller upward CPI revisions, a 4-1 voting split and one less hike reflected in the QPM tempering the hawkish message.
  • Nevertheless, the SARB stuck to its forward guidance for a gradual normalization, while highlighting the balance of risks remains tilted to the upside.
  • For now, there is no risk of an accelerating in the pace of hikes, but the SARB will be happy to comply, should the inflation outlook rise above forecasts.
  • As expected, ZAR softened following the meeting, and has cleared its 100dma – trading around the 15.50 handle.
  • Terms of trade fell -3.76% yesterday on the back of USD strength, also contributing to ZAR weakness.
  • Intraday Sup1: 13.4435, Sup2: 15.3663, Res1: 15.5230, Res2: 15.6681
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.