USD/ZAR drops and tests weekly lows near 14.60
|- USD/ZAR accelerates the downside to 14.60.
- The SARB left the repo rate unchanged at 6.50%.
- The 100-day SMA at 14.5757 holds the weekly downside.
The South African Rand is extending its upside momentum in the second half of the week, now dragging USD/ZAR to fresh session lows in the 14.60 area.
USD/ZAR offered post-SARB decision
ZAR gained extra pace today after the SARB left unchanged the repo rate at 6.50% amidst a divided consensus among investors.
The central bank acknowledged that the outlook on the domestic economy remains fragile while inflation continues to run around the middle of the 3%-6% bank’s target range and inflation expectations appear to have lost some upside traction as of late.
Regarding the exchange rate, the central bank noted the Rand remains somewhat undervalued. The currency, adds the bank, has been supported by the better mood in the riskier assets although investors remain concerns over domestic growth and fiscal risks.
USD/ZAR levels to consider
As of writing spot is losing 0.36% at 14.6344 and faces the next support at 14.5758 (100-day SMA) seconded by 14.5036 (monthly low Sep.13) and then 14.3334 (200-day SMA). On the flip side, a break above 14.8430 (high Sep.17) would open the door to 14.9372 (21-day SMA) and finally 15.0999 (23.6% Fibo of the July-August rally).
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