Rand Price Analysis:
The South African Rand[4] has managed to maintain the downward trajectory against major currencies, buoyed by increased risk sentiment[5] and US Dollar[6] weakness. Despite a reduction in the number of new Covid-19 cases, the South African variant continues to hinder the progression of the vaccination program with the Johnson and Johnson vaccine displaying the highest level of effectiveness towards the unique strain. With the first batch of J&J vaccinations arriving earlier this week, healthcare workers are now eligible to receive the inoculation although further details regarding the rollout to the greater population remains vague.
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With the effects of the Coronavirus pandemic exasperating the dire state of an already somber economy, a catalyst for price action[8] rests in next week’s highly anticipated annual budget speech, delivered by South African Finance minister Tito Mboweni on Wednesday 24 February 2021. As private individuals brace themselves for further tax hikes, high levels of corruption have resulted in the collapse of several State Enterprises including power utility Eskom, placing further strain on companies and individuals alike and causing further reductions to economic output, creating further pressure on the government to bring forth a plan of action to address the shortfalls in current economic policy.
USD/ZAR Price Levels
Emerging Market (EM) currencies[9] have benefited from an increase in risk-on sentiment[10], weighing heavily on the US Dollar[11], allowing for bears trading USD/ZAR[12] to hold their ground below the key
