ForexEzy
No Result
View All Result
  • Home
  • Getting Started with Forex
  • Forex Education
    • Forex Basics
    • Forex Trading Strategies
    • Money Management
    • Risk Management
    • Technical Analysis
    • Fundamental Analysis
    • Trading Psychology
    • Social Trading
    • Automated Trading
  • Forex Tools
    • Forex Robots
    • Forex Indicators
    • Forex Signals
  • Top Forex Brokers
  • Top Forex Robots
  • Commentary
  • Blog
  • Home
  • Getting Started with Forex
  • Forex Education
    • Forex Basics
    • Forex Trading Strategies
    • Money Management
    • Risk Management
    • Technical Analysis
    • Fundamental Analysis
    • Trading Psychology
    • Social Trading
    • Automated Trading
  • Forex Tools
    • Forex Robots
    • Forex Indicators
    • Forex Signals
  • Top Forex Brokers
  • Top Forex Robots
  • Commentary
  • Blog
No Result
View All Result
ForexEzy
No Result
View All Result
Home Forex Market Commentary

USD/ZAR: What Next After the Hawkish SARB Decision?

by Adam Stanley
January 25, 2021
in Forex Market Commentary
0
USD/ZAR: What Next After the Hawkish SARB Decision?
0
SHARES
11
VIEWS
Share on FacebookShare on Twitter
  • The USD/ZAR is holding steady after the latest South African central bank decision.
  • The bank left interest rates unchanged, surprising many watchers.
  • It now expects to hike rates faster than estimated.

The USD/ZAR wavered after South Africa’s Reserve Bank (SARB) delivered its interest rate decision of the year. On Friday morning, the pair is trading at 14.78, which is 4.30% below the year-to-date high of 15.65.

SARB economy struggling

The South African rand has been in a strong downtrend in the past few months. The currency has gained by more than 20% against the US dollar from March last year. It has also risen by more than 10% against the euro and the British pound during this period.

This performance has happened at a discouraging time for the South African economy. The unemployment rate has risen to more than 30%, while the manufacturing, services, and mining sectors have all slumped. Further, important state-owned organizations like South African Airlines and Eskom have continued to face challenges.

Worse, the country has expanded its national debt significantly as the government deals with the pandemic. That has attracted credit rate downgrades from all major rating agencies like Moody’s, S&P Global, and Fitch.

SARB hints at rate hikes

It is against this backdrop that the South African Reserve Bank (SARB) concluded its meeting on Thursday. While most analysts were expecting the bank to slash rates again, it held steady. It left the main rate at 3.5% and committed to continue supporting the economy. 

Most importantly, like the Norges Bank, the bank hinted that it would start hiking interest rates sooner than previously guided. The bank said that it expects to have two interest rate hikes in the second and third quarters of this year. 

Two rate hikes by the SARB will be surprising because of the state of the economy. In fact, the economy was going through a recession even before the crisis. Therefore, rate hikes will possibly affect the recovery. Also, it will likely push the USD/ZAR lower since the Fed has warned that now was not the time to talk about rate hikes. Therefore, rate hikes by the SARB will possibly lead to a stronger rand, which will affect the country’s exporters.

In its decision, the bank warned that the economy contracted by about 7% in 2020, the worst performance in more than 90 years. While the country has reintroduced new curbs to reduce the coronavirus, the bank expects that the economy will grow by 3.4% this year and 2.4% and 2.5% in 2022 and 2023, respectively. It also expects that the rate of inflation will rise to 4.5% in the second quarter and average at 4.5% for the year.

SARB’s decision to hold was in line with what other central banks did this week. The Bank of Japan, Bank of Canada, European Central Bank,  and Norges Bank all decided to leave interest rates unchanged. 

USD/ZAR technical outlook

The daily chart shows that the USD/ZAR pair has been declining in the past few days. And this week, it formed a Doji pattern, which is usually a sign of potential reversal. The price is still slightly below the falling black trendline and at the same level as the 15-day and 25-day exponential moving averages. Therefore, in my view, the pair will still continue to drop in the near term as bears target the YTD low of $14.50. 

However, this price will be invalidated once the price rises above the highest point this year. That action will be an indicator that there are still more buyers in the market. 

USD/ZAR technical outlook
ShareTweet
Previous Post

Optimism Propels US Stocks To Record Levels

Next Post

Odin Forex Robot Review

Related Posts

USD/CNY: China Expected to Increase Retail Sales to Support the Yuan

USD/CNY: China Expected to Increase Retail Sales to Support the Yuan

by Tim Baudin
February 11, 2021
0

China has been the greatest beneficiary of the US-China trade war.Reduced consumption in China will lower economic output into 2021.A...

EUR/USD: Why the US Dollar Is Gaining Strength Against the Euro

EUR/USD: Why the US Dollar Is Gaining Strength Against the Euro

by Adam Stanley
February 8, 2021
0

Germany’s manufacturing index fell by 10% in 2020 as compared to 2019. New order levels are yet to return in...

EUR/TRY: Turkish Lira Poised to Strengthen with Soaring Exports

EUR/TRY: Turkish Lira Poised to Strengthen with Soaring Exports

by Richard Brase
February 8, 2021
0

The Turkish lira has gained more than 12% from December 2020 to February 2021.Export sales in Turkey rose by 2.5%...

USD/BRL: Brazil’s Low Rates and Positive Economic Pressure in 2021

USD/BRL: Brazil’s Low Rates and Positive Economic Pressure in 2021

by Tim Baudin
February 5, 2021
0

Brazil is expected to emerge from the high volatility witnessed in 2020.The push by the mining company Vale towards green...

EUR/JPY: Euro Expected to Ride on Positive CPI Data

EUR/JPY: Euro Expected to Ride on Positive CPI Data

by Adam Stanley
February 5, 2021
0

The EUR/JPY trading pair is expected to hit a new resistance above 130 due to robust European economic data.Japan’s reintroduction...

Load More

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Best Forex EA

  • ROFX 9/10
  • Forex Fury 8/10
  • FXgoodway 7.5/10
  • Z Trader FX EA 7/10
  • Forex Incontrol Reborn 6.5/10

Popular News

  • The Best RSI and CCI Combination Trading Strategy for Optimum Returns

    The Best RSI and CCI Combination Trading Strategy for Optimum Returns

    2 shares
    Share 2 Tweet 0
  • Rofx Review – High Profitability and Stable Performance Analysis

    29 shares
    Share 29 Tweet 0
  • The Best Forex Scalping Strategy – Using 3 Popular Technical Indicators

    0 shares
    Share 0 Tweet 0
  • The Best MT4 Indicators & Expert Advisors For Forex Trading

    2 shares
    Share 2 Tweet 0
  • How to check if the indicator is repainting?

    2 shares
    Share 2 Tweet 0

Trading

Footer

We are dedicated to demystify the world of forex trading for you – no matter what level you are on.

Categories
  • Automated Trading
  • Day Trading
  • Forex Basics
  • Forex Brokers
  • Forex Education
  • Forex Forecasts
  • Forex Indicators
  • Forex Market Commentary
  • Forex Robots
  • Forex Signals
  • Forex Tools
  • Forex Trading Strategies
  • Fundamental Analysis
  • Money Management
  • News
  • Risk Management
  • Social Trading
  • Technical Analysis
  • Top World Traders
  • Trading Psychology
  • Uncategorized
Tags
arbitrage atr bollinger bands cci chart patterns classics copy trading courses day trading forex brokers forex charts forex ea forex education forex forecasting Forex Indicators forex software reviews grid trading hedging ichimoku macd market cycles news trading oscillators price action trading rsi social trading strategies tips & tricks trading bots trading platforms trend trading Video
  • Terms of Use
  • Privacy Policy
  • Compensation Disclosure
  • Risk Disclosure
  • About Us
  • Contact Us

Copyright © 2020 by ForexEzy.com

No Result
View All Result
  • Home
  • Getting Started with Forex
  • Forex Education
    • Forex Basics
    • Forex Trading Strategies
    • Money Management
    • Risk Management
    • Technical Analysis
    • Fundamental Analysis
    • Trading Psychology
    • Social Trading
    • Automated Trading
  • Forex Tools
    • Forex Robots
    • Forex Indicators
    • Forex Signals
  • Top Forex Brokers
  • Top Forex Robots
  • Commentary
  • Blog

© 2020, Forexezy.