As of this morning the USD/ZAR is trading near the 16.97000 mark in relatively consolidated action as financial houses try to find equilibrium after yesterday’s encounter with long term highs. Tuesday’s apex of nearly 17.19009 had not been seen since September of 2020, this as coronavirus was still having a negative impact on the South African economic outlook. Nowadays South Africa is dealing with inflation, and ‘loadshedding’ – which is an official government policy of rolling blackouts throughout the nation.
Yesterday’s volatility may have been sparked by whispers that a potential interest rate hike from the South African central bank this July may not be as large as anticipated. However, the price volatility experienced yesterday was certainly also in response to the notion the U.S central bank could remain aggressive. Inflation data will come from the U.S later today which will impact Forex, including the USD/ZAR and traders will need to be ready for the possibility of spikes.