USD/ZAR still near 2-week peak ahead of South Africa PPI data

Key points

The South African Rand was a notch weaker against the US Dollar on Thursday, as market players looked to South African PPI report later in the day.

The USD/ZAR pair seemed to have encountered resistance near June 23rd’s two-week high of 18.7739.

Statistics South Africa is due to release the official Producer Price Index data for May at 9:30 GMT. Producer prices probably rose at an annual rate of 7.3% last month, according to market consensus estimate, following an 8.6% surge in April.

“Both final and intermediate producer price inflation has cooled off rapidly in recent months, and the trend is set to continue,” ETM Analytics wrote in an investor note, cited by Reuters.

Meanwhile, the US Dollar remained firm against major peers on Thursday, after rather hawkish remarks by Federal Reserve Chair Jerome Powell.

Speaking on a panel with ECB President Christine Lagarde, Bank of Japan Governor Kazuo Ueda and Bank of England Governor Andrew Bailey on Wednesday, Powell said two more rate hikes were likely by year-end. The Fed Chair did not rule out the possibility of a rate increase next month.

As of 9:25 GMT on Thursday USD/ZAR was inching up 0.04% to trade at 18.6524. Last Friday the exotic Forex pair went up as high as 18.7739. The latter has been the pair’s strongest level since June 9th (18.9001).