The USD/ZAR price is under pressure after the latest American inflation data. The pair declined to 14.0487, which is about 8.43% below its highest point in August.
The USD/ZAR pair declined after the latest American inflation data. The numbers showed that the country’s consumer price index (CPI) declined from 5.4% to 5.3% in August as airfares. This decline was understandable since many airlines in the country like Delta, United, and American Airlines have recently lowered their guidance.
The prices of vehicles also declined even as the ongoing supply shortage continued. In total, the core consumer price index declined from 4.3% to 4.0%. These numbers signalled that the Federal Reserve was right that the recent upsurge in inflation was temporary. Therefore, the bank is expected to hint about tapering in its upcoming meeting.
The USD/ZAR pair is also in a tight range as risks of more Covid-19 variants from South Africa rises. According to scientists, the 8.2 million+ HIV-infected people in South Africa were at risk of more variants since they are immuno-compromised. The scientists said:
“There is good evidence that prolonged infection in immune-compromised individuals is one of the mechanisms for the emergence of SARS Covid-2 variants. ou have this massive virus evolution, really the virus accumulating over 30 mutations.”
The USD/ZAR price has been under intense pressure lately. It has fallen from a high of 15.3750 to the current level of 14.29. Along the way, it has moved below the 50-day and 25-day moving averages while the Relative Strength Index (RSI) has been in a downward trend. The pair is between the important support and resistance levels at 13.42 and 15.5537.
Therefore, for now, the pair will likely remain in the current range as investors wait for the upcoming US retail sales and Fed and SARB interest rate decision. The key levels to watch will be the support and resistance levels at 13.42 and 15.5.