South African Rand: Gold prices support ZAR against US Dollar – TD Securities
TD Securities remains constructive on South African Rand (ZAR), noting that domestic headwinds have failed to generate sustained weakness and that USD/ZAR’s downtrend remains intact.
TD Securities maintains a constructive stance on the South African Rand (ZAR), citing domestic challenges that have not resulted in persistent dollar weakness and the ongoing downtrend of USD/ZAR. They argue that ZAR presents attractive carry as global risk sentiment remains resilient, and they view USD/ZAR rallies as opportunities to sell.
Domestic headwinds in South Africa have repeatedly failed to generate sustained ZAR weakness. Despite a brief USD/ZAR surge above the 200-day simple moving average in July due to an unexpected South African Reserve Bank (SARB) rate hold decision, the market quickly returned USD/ZAR back below 16.00 in August. Global macro variables, particularly gold prices and equity risk sentiment, continue to drive the ZAR.
TD Securities expects USD/ZAR rallies to remain selling opportunities as long as gold stays supported above $4,000 per ounce and global equity sentiment stays strong.
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