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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.
SOUTH AFRICA
- ZARJPY has been trading above the psychological 8support level after rejecting it earlier this month.
- The risk off environment in the past few weeks has been weighing on the rand; the ZARJPY pair is down nearly 9% since its higher of 8.8060 reached in early June.
- We previously mentioned the formation of a double top – neckline on the pair; key support to watch below 8 stands at 7.8760, which corresponds to the neckline (and also the 50% retracement of the 6.9450 – 8.8060 range).
- SARB is meeting on July 21 with median consensus expecting a 50bps hike.
- With the FRA 1Mx4M – 1M IB spread currently trading at 58bps, market expectations for a 50bps hike is fully priced in and slightly skewed towards a 75bps.
- Hence, a 50bps hike could be perceived as ‘dovish’ and could lead to further retracement on ZARJPY, potentially breaking below the psychological 8 support.
- On the other hand, a 75bps hike will mark the start of a hawkish stance from the central bank and therefore lead to some positive bounce on the rand.
- Resistance to watch on the topside stands at 8.23 (100DMA).
Source: Bloomberg/MNI
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.
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