Societe Generale analysts emphasize a mighty rebound in global risk appetite, in favor of the South African rand. USD/ZAR is seen as vulnerable after failing to hold above the 200-day moving average at 17.00, with a possible move towards 16.00. Softer SARB tightening expectations and lower local yields provide further support for ZAR.
The rand benefits from the carry and risk offer
“ZAR is a clear beneficiary, supported by a rebound in risk and a renewed rally in gold.”
“USD/ZAR looks vulnerable, with the possibility of strengthening towards 16.00 after failing to stay above the 200dma (17.00).”
“Local interest rates add fuel to the rand – SARB FRAs have aggressively re-priced, which now means a tightening of just 19bp at the next meeting (vs. 34bp last week) and 36bp overall by year-end (vs. 83bp).”
(This article was created with the lend a hand of an artificial intelligence tool and has been reviewed by an editor.)
