Oil surged amid soft dollar
Oil is edging higher due to the overall risk-on sentiment and a weaker US dollar. Jump in to get the tech tips!
South Africa’s GDP and vaccine hopes drove ZAR up
Information is not investment advice
USD/ZAR dropped to the low levels unseen since February as investors foresee the soon global recovery.
What happened?
Some countries such as the UK started massive vaccinations, while others are already in the final steps. Therefore, investors streamed their capital to riskier assets like emerging market currencies on prospects for a global economic recovery. Indeed, the virus will be taken under control soon and the world economy will be boosted. According to Credit Suisse, “EM [emerging market] also looks well positioned to outperform whether there is a value- or growth-driven rally in 2021”.
Why specifically emerging markets?
It was necessary to impose record low interest rates in the world’s largest economies to stimulate economic activity. These countries won’t increase rates anytime soon. Whereas emerging markets have significantly higher rates and therefore higher yields. That’s why it’s beneficial to invest money in emerging markets.
Market reaction
USD/ZAR fell due to the optimistic vaccine news and the weak US dollar. Elsewhere, South Africa’s GDP recovered by 66.1% in the third quarter, showing the steady economic rebound of the country. However, it is still far away from the pre-pandemic levels.
Technical tips
Traders should closely observe this pair now as it has approached the key support of 15.0000. The price isn’t likely to break this level for the first attempt and we might see the retracement. If it manages to cross this level, the way down to February lows of 14.7250 will be clear. On the flip side, the move above the 50-period moving average of 15.2500 will drive the pair to the high of November 30 at 15.4500.
Kseniya Medik
Similar
ALIBABA: unclear future
On Wednesday, at 14:30 GMT+3 Alibaba reports its quarterly earnings. Will they push the stock?
Tesla is at local dips. When will it rise?
This article describes how Tesla is positioned now on the stock market, what headwinds and tailwinds it has, and what analysts forecast.
Popular
Oil surged amid soft dollar
Oil is edging higher due to the overall risk-on sentiment and a weaker US dollar. Jump in to get the tech tips!
Stocks and triangle patterns
We love triangles because they're easy to spot and predict possible price moves. Do we have any in the stock market?
Euro further strength is ahead
Fibonacci Levels XAU/USD: Gold facing a further consolidation above 23…
Choose your payment system
