USD/ZAR awaits the Moody's rating

USD/ZAR awaits the Moody's rating

2019-11-11 • Updated

South Africa anticipates the Moody's review of the country's debt. The release was scheduled on Friday, October 12, however, it was postponed. Some analysts expect it to be released after the Medium-term budget policy statement (MTBPS) on October 24.

The last release of Moody's in the first half of 2018 placed South Africa on the Baa3 credit rating at investment grade with a stable outlook. Baa3 means average credibility. This could happen due to president Cyril Ramaphosa's medium-term budget plan, which was designed to recover the South African economy. 

However, the South African economy has fallen into the recession since that time. The level of GDP decreased by 0.7% in the second quarter, while the leading economic index decreased by 0.9% in July. This made the government continue expenditures in order to meet the markets deficit targets. That is why Moody's investment grade of the country can be downgraded for the current period.

The overall economic situation is heated by the scandal around the former finance minister of South Africa Nhlanhla Nene and his connection to the state capture scandal and the Gupta family. The Gupta family was financed through tenders and influenced the government decisions during the Jacob Zuma presidency. This scandal is also the reason for Mr. Zuma resignation. The new president Cyril Ramaphosa appointed the new finance minister Tito Mboweni just a week before the Moody's rating release.

How these events affect the South African Rand?

The Tito Mboweni appointment as a finance minister was warmly welcomed by the markets. Since the decision was made, USD/ZAR fell below the support at 50-day MA (14.52). The Moody's delay also brings some positivity to bears.  For now, the pair is moving downwards the support at 14.2660.

If we look at the technical side, there is a Head and Shoulders formation on the chart with the support at 14.1. If the finance minister’s statement is hawkish and the USD is weak, the pair can continue falling to the support at 12.99 (200-day MA).


 If Moody's places the country on a lower investment grade, it will be a destructive move not only for the economy but also for the ZAR. The instability will force the international investors to get rid of the government bonds from their portfolios. This move will create the capital outflow from the country. If the rand weakens, the pair can reach the resistance at 14.9570. After that, the next target resistance for the pair is 15.6935.

To conclude with, the key events for the ZAR are the medium term policy statement by the new finance minister Tito Mboweni and the Moody's rating release. Possibly, the financial policy statement by Mboweni will influence the Moody's decision as well.


Forex forecasts 2021
Forex forecasts 2021

The year-end is getting closer. What will 2021 bring us? Let’s find out what major banks expect!

Latest news

Will USDJPY slide lower in 2023?
Will USDJPY slide lower in 2023?

Last year was tough for the Japanese yen. USDJPY gained more than 30% over 2022, striking above 150 in October. While anticipation of slower Fed rate hikes pulled the pair below the 130 level at the start of 2023, the speculations over the destiny of BOJ’s yield control policy grabbed the attention of the Japanese assets in the middle of January. What lies ahead for traders of the Japanese yen?

BoC Rates Could Alter The Trend on USDCAD and others
BoC Rates Could Alter The Trend on USDCAD and others

Today, at 5:00 pm (GMT +2), the Bank of Canada will publish the Overnight Rate, which represents short-term interest rates, and is pivotal to the overall pricing of the Canadian Dollar in the global markets. Let's look at how the markets are faring ahead of the BoC rates release.

MSFT faces gloomy forecasts ahead of earnings report
MSFT faces gloomy forecasts ahead of earnings report

In a call scheduled for January 25, 00:30 am GMT+2, Microsoft will publish the company's earnings for the final quarter of 2022 and comment on the results, projections, and outlook for the nearest future of the company.

Deposit with your local payment systems

Feel the Team Spirit

Data collection notice

FBS maintains a record of your data to run this website. By pressing the “Accept” button, you agree to our Privacy policy.


A manager will call you shortly.

Change number

Your request is accepted.

A manager will call you shortly.

Next callback request for this phone number
will be available in

If you have an urgent issue please contact us via
Live chat

Internal error. Please try again later

Don’t waste your time – keep track of how NFP affects the US dollar and profit!

Beginner Forex book

Beginner Forex book will guide you through the world of trading.

Beginner Forex book

The most important things to start trading
Enter your e-mail, and we will send you a free Beginner Forex book

Thank you!

We've emailed a special link to your e-mail.
Click the link to confirm your address and get Beginner Forex book for free.

You are using an older version of your browser.

Update it to the latest version or try another one for a safer, more comfortable and productive trading experience.

Safari Chrome Firefox Opera