- Summary:
- The USDZAR is down 0.50% on Wednesday as the South African Rand bounces back from an early-week U.S. dollar rally on virus fears.
The USDZAR is down 0.50% on Wednesday as the South African Rand bounces back from an early-week dollar rally. The greenback bounced as fears of further lockdowns came to the fore.
The talk of a new virus variation in the U.K. saw 40 countries banning travel to the country and this was at risk of spreading into further countries and removing the vaccine rollout recovery theme that has boosted risk markets.
A recent Reuters poll has said that the South African economy will expand 3.9% next year after dropping nearly twice that rate in 2020 and this is boosting the Rand. This was echoed by JP Morgan analysts who said:
“The (Q3) upside surprise also technically lifts 2021 year-on-year growth by almost as much, yet the impact on the 2021 forecast will be pared down by a likely softer first quarter”.
The dollar has been under pressure after the recent approval of a new stimulus package. President Trump has thrown a spanner in the works by sending the deal back to Congress demanding an increase in paycheck support for the people after the bill was full of programs that he called a “disgrace”.
USDZAR Technical Outlook
USDZAR has continued its descent after it got below the 15.00 level. The early-week drama saw a spike towards that level and it highlights the risk of a dollar bounce. The next path will depend on the recent bounce at 14.50 and whether we move to 15.00 or 14.00. The Investing Cube team is currently available to help all levels of traders with the Forex Trading Course or one-to-one coaching.
USDZAR Daily Chart
