- The US dollar has rallied rather significantly against the South African Rand during the early hours on Monday to reach towards the 18 Rand level.
- All things being equal, this is a market that I think continues to see a lot of noisy behavior as we are bouncing around between the 18 level and the 17.6 level.
- In general, I think this is a market that is just trying to sort out what we are going to do.
As long as we do not understand what's going on with risk appetite around the world, there is going to be a little bit of a bid for the greenback. Remember, there are a lot of uncertain traders out there right now, and I think that will continue to be a major factor in general.
Top Forex Brokers
Interest Rates May Not Be the Cause of a Move
Keep in mind that the interest rate differential does favor South Africa, but quite frankly, South Africa is not a place people are going to be looking toward when it comes to risk environment that is uncertain. Although, having said that, so far, it has held up fairly well. If we were to break above the 18 Rand level on a daily close, then we could see the US dollar rally all the way to the 18.5 level.
On the other hand, if we pull back from here, we should continue to see the 17.6 level offer plenty of support. Anything below there, then we start to see the bottom fall out. Keep in mind, this is a market that is going to be very noisy as it is a US dollar emerging market type of currency pair. That area that we are in right now looks like it's probably going to try to hold. So, with this, I think you've got a situation where we are just going back and forth, and short-term traders continue to kick this pair around.
Ready to trade our Forex daily analysis and predictions? Here are the best Forex brokers with ZAR accounts to choose from.