The ZAR?reversed recent losses after US CPI printed lower than expected.
The ZAR retraced Wednesday’s losses to reach R18.6500 after US CPI missed to the downside.
- The Dollar losing ground after yields briefly dropped below 4%.
- The index falling below 102, after CPI indicated a slowdown in price pressures that could place a hold on the Fed’s hiking cycle.
- The US dollar was steady on Friday, with the index hovering around 102.5,
- The annual inflation rate in the US rose to 3.2% last month from 3% in June, below forecasts of 3.3%;
- while core inflation edged down to 4.7% from 4.8%, also less than expectations of 4.8%.
- Traders digested US headline inflation reading for July that showed a moderate increase.
- Risk assets rallied sharply, but reversed as fast after San Francisco Fed president, Mary Daly said the latest CPI numbers do not mean that the central bank can declare a win over inflation.
- The pressure of issuances from the US treasury department also keeping rates elevated will support the Dollar for now.
- The news stopping and reversing the rally as yields once again spike to 4.10% resulting in a Dollar rebound.
- She added that the labour market is not yet balanced, and that rates will have to remain higher for longer.
- We expect?the ZAR to consolidate between?19.0000 to 18.7000 after another volatile week.
- USDZAR?18.8300
- DOLLAR 102.39
- EURUSD 1.0993
- SP500 4,492
- GOLD?1917
- US10YT?4.09%
