EM Currencies: My Take on USD/ZAR Testing 19.50 by Month-End
Been watching USD/ZAR closely lately, and the recent weakness has me thinking about its ceiling in the near-term. We've seen a pretty consistent move higher, and while the dollar strength is a factor, there's definitely some local SA-specific noise in there too, particularly around political uncertainty and Eskom.
My gut says we'll see a test of 19.50 before the end of the month. I'd put the probability of that happening at around 65-70%. The momentum is there, and I don't see any major catalysts on the horizon that would significantly strengthen the Rand enough to hold it below that level. Could be a decent scalp opportunity on the long USD side if you're quick, but I'm mainly looking at it as a directional forecast for now. Just my two cents, not advice.
Interesting call. What's your reasoning for 19.50 specifically? Is there a technical level you're watching, or mostly a sentiment play on the SA noise?