Dollar rally
The dollar has given up some substantial ground in the past 3 weeks. This has helped along the risk-on rally we have witnessed and supported our local currency. The rally in USD/ZAR has been around R1.50 in the past 3 weeks. The dollar index is now running into substantial support at the 200-day moving average. We think this support will hold for now and that there can be a bit of a correction. This could see the R16.95 level act as support for now on USD/ZAR, and a test back to R17.30 is possible.
Oil remains under pressure
Covid numbers in China continue to surge, and with this, the worries about demand from China linger. Oil is trading flat on the day, around $85 per barrel for Brent Crude and $79 per barrel for WTI. But again, oil is about 20% off its recent peaks on the China Covid demand worries. Elsewhere with the US being out of the market today, the trading in metals being either precious or base has been relatively subdued.
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