South African rand's resilience is being eroded
Nov 22 (Reuters) -The U.S. dollar continues to rise against emerging, commodity and risk currencies and, despite its resilience, the South African rand is struggling to maintain any kind of a recovery.
Uncertainty surrounding future changes to U.S. economic policy under a Donald Trump administration has more than offset any positive domestic news for the rand.
Growth and inflation worries are weighing heavy on the risk markets and, despite a pullback in USD/ZAR from 18.3950, the dollar looks set to test the 200-day moving average, which has contained the market on a closing basis since June.
An improving domestic backdrop has, to a degree, insulated the rand from much of the geopolitical and global growth concern, but any gains are likely to be limited while the Trump trade hangs over the market.
South African interest rates were cut 25-basis points Thursday. The move was expected but still injected a fresh bid into USD/ZAR. A cautious rate cut as the Reserve Bank looks beyond the soft October inflation data and points to the upside risks to prices.
USD/ZAR is currently trapped between the 100- and 200-day moving averages, 17.8500 and 18.2575, respectively. Possibly the best the rand can hope for is a period of consolidation between the two technical levels.
For more click on FXBUZ
USD/ZAR daily candle chart: https://tmsnrt.rs/3Z2g08d
(Peter Stoneham is a Reuters market analyst. The views expressed are his own)
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