RAND ANALYSIS & TALKING POINTS
- Souring threat urge for food hurts rand.
- South African commodity exports does its greatest to restrict ZAR losses.
- R18.50/$ a really actual chance.
USD/ZAR FUNDAMENTAL BACKDROP
The South African rand stays depressed towards the U.S. greenback after the Federal Reserve’s hawkish narrative triumphed over the latest ‘Fed pivot’ experiences shared by markets. Extra lately, escalating tensions in Ukraine have bolstered the greenback’s protected haven enchantment as threat aversion overshadows riskier belongings comparable to Rising Market (EM) currencies together with the rand. As well as, a worldwide slowdown and recessionary fears weigh negatively on the native forex however one saving grace for the South African economic system has been the vitality disaster plaguing Europe. As a consequence of lack of consistency by way of pure gasoline provide, many European nations have now turned to coal utilization of which South Africa is a serious producer. In 2022 alone, coal exports have elevated +/- 11 fold giving some assist for the ZAR and with the winter months approaching, the development could intensify.
Earlier as we speak (see financial calendar under) the manufacturing manufacturing statistics for South Africa beat estimates on each MoM and YoY metrics which echoes the rise in demand for sure South African commodity exports. This night Fed audio system dominate the agenda as markets keenly await U.S. inflation knowledge later within the week.
USD/ZAR ECONOMIC CALENDAR
Supply: DailyFX Financial Calendar
USD/ZAR DAILY CHART
Chart ready by Warren Venketas, IG
Day by day USD/ZAR value motion exhibits bulls pushing yesterday’s recent yearly highs at 18.2357 which is more likely to be breached and expose the 18.5000 psychological resistance deal with. Whereas bearish divergence continues to be creating as indicated on the Relative Energy Index (RSI), there’s nonetheless room for additional upside in direction of RSI resistance (pink) – coinciding with the overbought area.
- 20-day EMA (purple)
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