- USD/ZAR hovers around the 15.20 region.
- S.African inflation figures came in short of estimates.
- Focus remains on FOMC minutes today, Powell on Friday.
The South African Rand keeps gaining momentum on Wednesday and is dragging USD/ZAR to fresh multi-day lows in the 15.20 region.
USD/ZAR retreats from 2019 highs
After recording new yearly highs just below 15.50 on Monday, the pair sparked a move lower in response to renewed buying interest in the Rand.
Data wise today, inflation figures in South Africa showed headline consumer prices rose 0.4% on a month to July and 4.0% over the last twelve months. Prices stripping food and energy costs increased 0.4% inter-month and 4.2% from a year earlier, all prints coming in below expectations.
Despite inflation figures came in below estimates today, the CPI continues to run well within the 3%-6% target. However, the recent sharp depreciation of the Rand could temper the SARB intentions to cut rates in order to boost the economy and face the global financial dovishness.
Later today, the FOMC will publish its minutes from the last meeting. The Greenback is expected to be in centre stage on the potential divided stance from the Committee over the Fed’s rates path. On Friday, all the attention will on the speech by Chief J.Powell at the Jackson Hole Symposium.
What to look for around ZAR
The Rand met strong resistance in the 13.80 region vs. the Greenback soon after the SARB reduced its key rate to 6.50% at its July meeting disappointing investors’ expectations of a larger move on rates. The central bank justified its decision in response to projections of lower inflation and GDP growth in the next periods. The generalized view that potential Fed easing could spark fresh inflows into the EM FX universe could not apply for ZAR, as political corruption within the ruling ANC party carries the potential to undermine President Ramaphosa’s position and the ability to push for vital structural/economic reforms in the country.
USD/ZAR levels to consider
As of writing spot is losing 1.24% at 15.1745 and faces the next support at 15.0850 (low Aug.13) seconded by 14.8518 (21-day SMA) and then 14.2340 (200-day SMA). On the flip side, a break above 15.4979 (2019 high Aug.19) would aim for 15.4990 (high Aug.13 2018) and finally 15.6935 (2018 high Sep.5).
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD extends gains above 1.0700, focus on key US data
EUR/USD meets fresh demand and rises toward 1.0750 in the European session on Thursday. Renewed US Dollar weakness offsets the risk-off market environment, supporting the pair ahead of the key US GDP and PCE inflation data.
GBP/USD extends recovery above 1.2500, awaits US GDP data
GBP/USD is catching a fresh bid wave, rising above 1.2500 in European trading on Thursday. The US Dollar resumes its corrective downside, as traders resort to repositioning ahead of the high-impact US advance GDP data for the first quarter.
Gold price edges higher amid weaker USD and softer risk tone, focus remains on US GDP
Gold price (XAU/USD) attracts some dip-buying in the vicinity of the $2,300 mark on Thursday and for now, seems to have snapped a three-day losing streak, though the upside potential seems limited.
Injective price weakness persists despite over 5.9 million INJ tokens burned
Injective price is trading with a bearish bias, stuck in the lower section of the market range. The bearish outlook abounds despite the network's deflationary efforts to pump the price.
US Q1 GDP Preview: Economic growth set to remain firm in, albeit easing from Q4
The United States Gross Domestic Product (GDP) is seen expanding at an annualized rate of 2.5% in Q1. The current resilience of the US economy bolsters the case for a soft landing.