ZAR has seen an aggressive year-to-date capitulation at almost 12% against the USD. Economists at CIBC Capital Markets analyze USD/ZARLast month, the SARB hiked rates to 8.25%, levels not seen since 2009. Watch for a further 25 bps hike in July.
For USD/ZAR, a retracement back to 18.75 would be consistent with long-end spreads easing back to 800 bps from post-crisis levels at 880 bps. Such a scenario will require confidence that the SARB cycle has peaked while ZAR geo-political tensions need to dissipate.Information on these pages contains forward-looking statements that involve risks and uncertainties.
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