USD/ZAR extends the rangebound theme near 14.60
- USD/ZAR resumes the upside to the 14.60 region on Thursday.
- The SARB left the policy rate unchanged at 3.50%.
- SARB sees 2021 GDP expanding 4.2%, 2023 at 2.4%.
The South African rand loses momentum and motivates USD/ZAR to regain upside traction and advance to the 14.60 region on Thursday.
USD/ZAR up post-SARB steady hand
USD/ZAR reverses Wednesday’s pullback after the SARB - in a unanimous decision - matched previous estimates and left the policy rate unchanged at 3.50% at its event earlier in the session.
The SARB also revised up its forecasts for inflation and now sees prices rising 4.3% this year (from 4.2%), 4.2% in 2022 and 4.5% in 2023. Core CPI, instead, is seen around 2.9% this year (vs. 3% prev). Still on inflation, the SARB sees upside risks stemming from food, fuel and power.
Regarding GDP, the central bank still sees downside risks, although it expects the economy to expand 4.2% in 2021, 2.3% the next year and 2.4% in 2023.
Further out, the central bank noted that decisions on policy will be data dependent and that its model shows a 25 bps rate hike per quarter in 2022.
USD/ZAR levels to consider
As of writing spot is gaining 0.42% at 14.6166 and a break above 14.7772 (200-day SMA) would open the door to 14.7885 (monthly high Jul.14) and finally 15.0974 (high Mar.15). On the other hand, the next support is located at 14.3346 (low Jul.16) seconded by 14.3226 (100-day SMA) and then 14.1648 (monthly low Jul.16).