- The USD / ZAR falls to fresh multi-week lows near 14.60.
- Manufacturing production contracted by 0.1% month-on-month in December.
- President C. Ramaphosa will speak about the SOTN later on Thursday.
The South African rand is gaining more traction, dragging USD / ZAR to fresh multi-week lows in the vicinity of 14.60 on Thursday.
USD / ZAR now turns its attention to politics
USD / ZAR quickly leaves Wednesday’s rally behind and resumes the downtrend with the initial target in the zone of 14.60. Meanwhile, the pair is trading on the defensive for the fifth week in a row so far, as the combination of the better tone of the complex risk, rising commodity prices and a weak dollar all play in favor of one more rand. strong.
Furthermore, in support of the upward momentum of the ZAR, Data released today showed manufacturing output contracted 0.1% month-on-month in December, improving estimates and easing the 1.3% drop in November. Mining production also reversed the previous sharp contraction (9.4%) and expanded 0.1% monthly in the last month of 2020. Gold production contracted 0.9% compared to the previous year, also improving the 6.4% drop in the previous reading.
Investors, meanwhile, are expected to closely follow President Cyril Ramaphosa’s state of the nation address later Thursday, with the focus on launching the vaccine, programs geared toward helping the economy and the always thorny issue of electricity shortages, specifically Eskom.
USD / ZAR levels to watch out for
As of this writing, the pair was backing down a 0.76% at 14.6304 and faces the next support at 14.5050 (Jan 4, 2021 low), followed by 14.2729 (Jan 23, 2020 low) and then 13.9311 (Jan 2, 2020 low). On the other hand, a break above 14.9886 (55-day SMA) would open the door to 15.3775 (Jan 28 high) and finally to 15.6609 (maximum of January 6, 2021).
.
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
