G20: what did the leaders decide?
The G20 summit took place in Bali, Indonesia, on November 2022…
Danske Bank forecasts USD/ZAR at 15.00
Information is not investment advice
The South African Reserve Bank (SARB) left its interest rate unchanged. That decision underpinned the rand and allowed it to close green yesterday. The enormous government support measures in combination with optimistic vaccine news encouraged investors to stream their capital to emerging markets currencies such as the rand. Nevertheless, the current cautious market sentiment has limited the ZAR’s potential to rise. The fresh virus outbreak and related lockdowns, curfews, and social distancing restrictions toned the risk-on impetus down.
Forecasts
Indeed, there are downbeat risks for the African rand in the short term, but many analysts forecast the steady rebound of economic activity in 2021(which is so close already). Therefore, stocks and riskier currencies such as the rand will get a boost.
If we look at the USD/ZAR chart, we’ll notice that the rand has managed to regain most of its losses already. As Danske Bank properly mentioned, “we view most, if not all, of the fall in USD/ZAR as due to global tailwinds, not domestic”. In other words, the only risk-on sentiment would be enough to underpin the rand and drive USD/ZAR even lower. Danske Bank’s forecast is 15.0000 for the coming months. "We could see more emerging market strength in coming months as the reopening continues”. In addition, many credible banks such as JPMorgan and Goldman Sachs predict a soon fall of the USD, which would be beneficial for the ZAR.
Technical tips
After the gradual falling, USD/ZAR formed the symmetrical triangle, so the pair may go anywhere now. If it breaks the upper trend line at yesterday’s high of 15.5700, the way to the next resistance of 15.6500 will be clear. In the opposite scenario, the move above the lower trend line of 15.3180 will drive the pair lower to November’s low of 15.2000.
Similar
The End of Era: What Might the UK Face Next?
The deafening news shocked the whole world yesterday: the British Queen Elizabeth II died peacefully at the age of 96…
Why didn't oil prices calm despite OPEC+ attempts?
After months of pressure from the White House, Saudi Arabia relented and agreed with other OPEC+ members to increase production.
Popular
European Currencies Ahead of the Banks' Statements
On Thursday, the 2nd of February, the Bank of England will publish its report concerning interest rates and inflation data for the Eurozone. Professionals and investors anticipate that Andrew Bailey’s lead team of policy makers will likely raise interest rates to 4%; the highest in over a decade, for the tenth time in a row.
Will the FOMC Surprise the Markets?
The first FOMC meeting comes after a buildup of anticipation from traders and investors alike, as the markets await what posture the Fed will take regarding the interest rates; would there be a hike or a cut in interest rates? Recall that the Federal Open Market Committee had previously ended the year 2022 with a 50bps hike, and an indication from Powell, the committee chairman, that the Fed could consider raising interest rates by 75bps in the course of the year 2023.
What awaits the Oil Market in February?
Western countries are trying to find other options for oil and gas supplies after a 10th package of sanctions, which will put more pressure on Russian oil and decrease global oil supply. Italy, for example, is in talks with Libya.
Choose your payment system
