The USD/ZAR exchange rate moved sideways on Wednesday morning as investors focused on key economic events. The USD to South African rand exchange rate was trading at 16.50, which was slightly above this week’s low of 16.11. The price was also about 5% below the highest level this year.
South African rand pressured
The USD/ZAR price has moved slightly upwards as investors rush to safe havens. It will next react to the latest economic data from the United States and South Africa. The US will publish the latest retail sales numbers on Wednesday.
Economists expect these numbers to show that the headline retail sales dropped from 1.0% in June to 0.1% in July. In the same month, the core retail sales are expected to have dropped from 1.0% to -0.1% The US will also publish the latest mortgage data.
Meanwhile, in South Africa, data by the statistics agency is expected to show that the country’s retail sales rose from 0.1% in May to 0.4% in June. The low retail sales growth is mostly because of the country’s soaring inflation, which sits at the highest point in 13 years. The central bank has also been hiking interest rates recently.
The USD/ZAR pair will also react to the latest minutes by the Federal Reserve. These minutes will provide more clarity about what officials decided in their last meeting. They will also provide more guidance about what to expect in the upcoming meeting.
USD/ZAR forecast
The four-hour chart shows that the recent strength of the South African rand has waned. The USD to ZAR exchange rate was trading at 16.40, which was lower than the year-to-date high of 17.30. It is slightly above the important support at 16.31, which was the highest point in May.
Also, the pair was consolidating along the 25-day moving average. Therefore, the pair will likely continue falling as sellers target the next key support level at 16. A move above the resistance point at 16.60 will invalidate the bearish view.
