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2020-12-08 • Updated
USD/ZAR dropped to the low levels unseen since February as investors foresee the soon global recovery.
Some countries such as the UK started massive vaccinations, while others are already in the final steps. Therefore, investors streamed their capital to riskier assets like emerging market currencies on prospects for a global economic recovery. Indeed, the virus will be taken under control soon and the world economy will be boosted. According to Credit Suisse, “EM [emerging market] also looks well positioned to outperform whether there is a value- or growth-driven rally in 2021”.
It was necessary to impose record low interest rates in the world’s largest economies to stimulate economic activity. These countries won’t increase rates anytime soon. Whereas emerging markets have significantly higher rates and therefore higher yields. That’s why it’s beneficial to invest money in emerging markets.
USD/ZAR fell due to the optimistic vaccine news and the weak US dollar. Elsewhere, South Africa’s GDP recovered by 66.1% in the third quarter, showing the steady economic rebound of the country. However, it is still far away from the pre-pandemic levels.
Traders should closely observe this pair now as it has approached the key support of 15.0000. The price isn’t likely to break this level for the first attempt and we might see the retracement. If it manages to cross this level, the way down to February lows of 14.7250 will be clear. On the flip side, the move above the 50-period moving average of 15.2500 will drive the pair to the high of November 30 at 15.4500.
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After months of pressure from the White House, Saudi Arabia relented and agreed with other OPEC+ members to increase production.
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In September 2022, USDSGD almost retested its peak of March 2020. The pair spiked above the 1.4400 level, driven by the strong US Dollar. Despite the obvious dominance of the USD, analysts believe that the Singapore dollar may be the one exotic currency worth our attention. Why do they share this opinion, and should we believe them?
Over the last couple of weeks, GBPUSD and a few other commodities have breached their recent swing highs and lows, while some have even gone on to create new All-Time Highs and Lows
A United Nations agency is warning that the central bank’s actions create a high risk of pushing the global economy into recession.
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