ZAR looks undervalued – Danske Bank
|Chief Analyst at Danske Bank Jakob Christensen assessed the prospects for the South African Rand in the upcoming months.
Key Quotes
“After the recent surge, we think that much of the good news is priced in and hence the rand may trade flat against the USD near term”.
“However, we see the ZAR being somewhat under-priced still relative to long-term fundamentals and an improved current account balance. As a result, we think the market will reassess policy intentions of the new president and take a pause from pushing the rand higher near term”.
“In addition, the rand may also be susceptible to a more hawkish monetary stance in advanced economies. Overall, we are cautiously bullish on the rand, seeing the trajectory for the USD/ZAR at 11.75 in 1M, 11.50 in 3M and in 11.25 in 6M and 11.25 in 12M”.
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