South Africa is grappling with financial challenges, marked by persistent energy outages, social unrest, and structural constraints hindering progress. The newest information from Statistics South Africa reveals a 1.2% quarter-on-quarter GDP progress in Q2 2023, pushed by mining, finance, and commerce, whereas agriculture, manufacturing, and building contracted. 12 months-on-year, GDP contracted by 17.2% in Q2.

Inflation, measured by the patron value index (CPI), rose to five.4% year-on-year in September, reaching a three-month excessive. Meals, non-alcoholic drinks, housing, utilities, and transport prices had been major contributors. Whereas nonetheless inside the South African Reserve Financial institution’s (SARB) goal vary of three% to six%, it moved farther from the 4.5% midpoint that the SARB goals to anchor.

The upcoming SARB rate of interest choice on November 23 is essential. Having maintained the repo charge at 8.25% in September, the SARB is using a cautious, data-dependent strategy, balancing financial assist and inflation containment. The SARB’s Quarterly Projection Mannequin suggests a possible 25 foundation factors charge hike in 2023, adopted by two extra hikes in 2024, contingent on inflation outlook and threat evaluation.

Inspecting the USDZAR technical evaluation on the day by day chart, the pair broke down the assist at 18.40 and the 200-day shifting common, buying and selling simply above the 61.8% Fibonacci degree at 18.39. A break under 18.25 might result in additional declines in the direction of 18.00 and probably 17.50. Conversely, a bounce would possibly encounter resistance at 18.52 and 18.78. The momentum indicators RSI and MACD are offering combined alerts, with RSI close to the impartial 50 degree, indicating a impartial bias, whereas MACD above the sign line suggests a bullish bias.

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Francois du Plessis

Market Analyst

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