ZAR is fracturing along geopolitical lines. Economists at ING expect the USD/ZAR pair to test 20.00 in the near term.
Broad Dollar bear trend will carry USD/ZAR lower later this year
“The US ambassador to South Africa accused the country of shipping arms (or allowing the shipment of arms) to Russia last December. USD/ZAR traded to a new record high on the news. The US ambassador has since backtracked on those comments – although it is unclear whether the accusation still stands. It will probably be hard to put this particular genie back in the bottle anytime soon.”
“Even though we think a broad Dollar bear trend will carry USD/ZAR lower later this year, in the nearer term – a febrile environment suggests USD/ZAR may challenge 20.00.”
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