Forex, News, Price Analysis

USD/ZAR Prediction: Rand Analysis Amid Soaring South Africa’s Inflation

  • USD/ZAR has witnessed massive bullish trends over the last few days.
  • South African inflation increased from June’s 7.4% to July’s 7.8%.
  • SARB will remain under pressure to escape hard landing.

USD/ZAR price noted uptrends on Wednesday, following South Africa inflation data. The pair rose towards the 17.05 peak, some points beneath this month’s highest index at 17.14. Meanwhile, it gained approximately 12% from the 2022 low in June.

South Africa Inflation

The USD-ZAR exchange rate maintained uptrends even after the recent inflation readings from South Africa. The nation’s statistics agency revealed that the CPI (consumer price index) increased to July’s 1.5% from June’s 1.1%. Meanwhile, the increase surpassed the 1.4% median estimate.

South Africa saw its inflation jumping to 7.8% from 7.4% Y/Y. The uptick exceeded the expected 7.7%. Meanwhile, inflation explodes at decade-high levels.

Inflation increased from June’s 0.6% to July’s 0.7%, excluding energy & food prices. Moreover, the surge outpaced the anticipated 0.6%. It climbed by 4.6% Y/Y. the statistics revealed that most items increased in prices.

These figures emerged one day after the latest unemployment stats. South African unemployment rate declined briefly from Q1’s 34% to around 33% during Q2. Thus, the SARB (South Africa Reserve Bank) will remain under massive pressure as the jobless rate and inflation maintain elevated figures.

The central bank has hiked interest to lower inflation. The issue is more rate increases will drastically curtail spending, translating to further economic impacts. Also, the USD/ZAR pair rallied due to the highly hawkish Fed Reserve. Meanwhile, Fed official Neel Kashkari stated that the central bank would keep hiking until inflation started falling.

USD/ZAR Prediction

The 4hr chart indicated that the USD-ZAR price maintained massive bullishness over the last few months. The current upside emerged after USD/ZAR declined towards the 16.10 lows – the lowest mark on 11 August.

The pair has climbed above the 25- and 50-dau MAs, whereas the Moving Average Convergence Divergence has launched a bearish divergence. Nevertheless, USD/ZAR will likely keep surging as the rand targets the crucial mark at 17.30. a decline beneath the support of 16.91 will cancel the bullish narrative.

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