The South African rand has led CEEMEA this month, rising about 2.4% against the US dollar in spot terms and delivering a 2.7% total return. USD/ZAR is now within 1% of moving below 16.00, a level last seen in early February, as the currency continues to trade as a risk proxy.
Support From Gold Prices And Federal Reserve Policy
Support has come from firmer gold prices and a dovish shift in Federal Reserve pricing after the latest US NFP and CPI releases.
Strong Foreign Bond Inflows
Flows into South African Government Bonds have reinforced the carry story: foreign buyers recorded net purchases of ZAR23.1bn in the first week of August, the strongest weekly inflow since January.