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Morning Wrap

15 August 2023

Good Morning

ZAR losses continued on the back of Dollar buying, following concerns about the Chinese property sector.

Market Movement Today:

  • The ZAR  traded above key level of R19.15/$ for a few moments, after banks hit easy buy stops above the level.
  • The unit recovering to open at R19.06/$ in early trading, but very much on the back foot vs the majors.
  • Concerns remain in financial markets with China’s property sector making headlines.
    • The PBoC cutting rates by 15bps to support the economy.
    • In addition;
      • The inflation problem continues, US treasury issuances (basically a form of QT) and rising US yields.
      • The US10YT at 4.20% supporting the dollar at the expense of high yielders like the ZAR and also Gold.  
  • Technically, we’ve tested R19.1500/$ via a stop hunt, but a re-test opens up higher levels for USDZAR.
  • We except the ZAR to remain on the back-foot in the current environment.
  • Trade :  BUY USDZAR

Markets this morning:

  • USDZAR 19.0700
  • DOLLAR 103.06
  • EURUSD 1.0915
  • SP500 4,501
  • GOLD 1905
  • US10YT 4.20%

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