USD/ZAR bounces off 9-month lows near 15.10
|- USD/ZAR drops further and approaches 15.00.
- South Africa CPI rose 0.3% MoM in October.
- Global stimulus keeps supporting ZAR and rest of EM FX.
The South African rand extends its monthly gains and drags USD/ZAR to new 9-month lows in the vicinity of the 15.00 mark on Wednesday.
USD/ZAR offered post-SARB decision
After bottoming out in the proximity of the 15.10 level earlier in the session, USD/ZAR managed to regain some upside traction, particularly after the October’s inflation figures surpassed expectations in October.
Indeed, headline consumer prices in South Africa rose 0.3% MoM during last month and 3.3% from a year earlier, while prices excluding food and energy costs ticked higher by 0.2% on monthly basis and 3.4% over the last twelve months.
The rand saw its upside pressure accelerated as of late in response to the improved sentiment around precious metals, while the generalized flows into the EM FX space on the back of global stimulus unleashed by central banks in order to fight the pandemic also collaborates with the momentum.
The better tone in ZAR comes despite the South African central bank (SARB) kept its policy rate unchanged at 3.5% at its meeting last week and hinted at the possibility of further easing in the next months. The SARB also revised lower its prospects for inflation and sees the 2020 GDP contracting 8.0%.
USD/ZAR levels to consider
As of writing spot is gaining 0.38% at 15.2543 and a break above 15.5819 (weekly high Nov.19) would open the door to 15.7331 (high Nov.12) and finally 15.9969 (61.8% Fibo of the January-April rally). On the downside, the next support is located at 15.1292 (monthly low Nov.25) seconded by 15.0884 (78.6% Fibo of the January-April rally) and then 13.9311 (2020 low Jan.2).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.