USD / ZAR bounces away from 9-month lows near 15.10

• USD / ZAR falls further and is approaching 15.00.
• South Africa’s CPI rose 0.3% month-on-month in October.
• The global stimulus continues to support the ZAR and other emerging market currencies.

The South African rand spreads its monthly gains and drags the USD / ZAR to new 9-month lows around 3pm on Wednesday.

USD / ZAR offered following SARB decision

After bottoming out near the 15.10 level early in the session, USD / ZAR managed to regain some bullish traction, particularly after October inflation figures beat expectations in October.

In fact, general consumer prices in South Africa increased 0.3% month-on-month over the past month and 3.3% year-on-year, while prices excluding food and energy costs increased 0.2% month-on-month and 3.4% over the past months. last 12 months.

The rand saw its upward pressure pick up lately in response to improving sentiment around precious metals, while widespread flows into the emerging market currency space in the wake of global stimulus unleashed by central banks to combat the pandemic also contributes to the momentum.

The better tone in ZAR comes despite the South African central bank (SARB) keeping its policy rate unchanged at 3.5% at its meeting last week and hinting at the possibility of further relaxation in the coming months. The SARB also revised down its inflation outlook and expects 2020 GDP to contract by 8.0%.

Technical levels

At time of writing, the spot is gaining 0.38% at 15.2543 and a break above 15.5819 (weekly high on Nov 19) would open the door to 15.7331 (Nov 12 high) and finally at 15.9969 (61.8% Fibonacci from rally from January to April). On the downside, the next support is located at 15.1292 (monthly low of November 25), followed by 15.0884 (78.6% Fibonacci of the January-April rally) and then 13.9311 (low of January 2, 2020).