TD Securities Sees Opportunity in ZAR Rallies Against Dollar

TD Securities remains optimistic about the South African Rand (ZAR), despite domestic headwinds that have failed to generate sustained weakness. According to the firm, USD/ZAR's downtrend remains intact and they view rallies in the pair as opportunities to sell.

The analysts point out that global macro variables such as gold prices and equity risk sentiment continue to drive ZAR movements. Specifically, they note that as long as gold remains supported above $4,000/oz and global equity sentiment stays resilient, USD/ZAR rallies should be viewed as selling opportunities.

In July, a surprise SARB rate hold decision briefly drove USD/ZAR above the 200-day SMA, but market participants were able to look past this policy misstep and push the pair back below 16.00 in August.