USDZAR range by end of July - a probabilistic view
Alright folks, casting a speculative eye on $USDZAR for month-end July. We're currently sitting around 16.3697. Given the global sentiment leans risk-off and the local Eskom issues showing no signs of miraculously disappearing, I'd put the odds of us seeing 16.80 at 65%. Conversely, the chances of it staying below 16.20 by then feel slim, maybe 20%, unless we get a major shift in commodity prices or some surprise dovish Fed talk.
The volatility's been something to behold, but the underlying narrative for ZAR isn't exactly screaming strength right now. It's not about being a permabear, it's about looking at the fundamentals and market psychology. The remaining 15%? Probably a messy chop between 16.20 and 16.80, but the bias is clearly skewed higher, in my humble opinion.
I'm with you on the Eskom factor; it's a constant drag. Do you think a significant rate hike from SARB could meaningfully counter the local issues and global risk-off sentiment, or is it largely priced in already?