USD/ZAR to push back to the 16.90 area on a hawkish SARB statement – ING

Today sees the South African Reserve Bank meeting to set interest rates. A 50 bps hike should help the Rand, in the view of economists at ING.

Softer USD environment and China’s reopening story to remain a bullish cocktail for ZAR

“The majority of forecasters are looking for a 50 bps hike to 7.50%, though a few are looking for a 25 bps hike.”

“The Rand has been underperforming this year and one would have expected the huge reversal in USD/CNY to be dragging USD/ZAR much below 17.00. That has not happened, perhaps because of the weak domestic demand outlook in South Africa amid ongoing challenges in energy supply.” 

“Yet a softer Dollar environment and the China reopening story should remain a bullish cocktail for the Rand and a hawkish SARB statement today could be enough to push USD/ZAR back to the 16.90 area.”

“Medium-term, we are becoming a little more bullish on the Rand.”