Forex - South Africa Flows: Rand underperforms on power cuts, presentation by the Department of Public Services, nationwide strike


 10:48 (GMT) 13 Feb

  [Forex Flows]

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South Africa Flows: Rand underperforms on power cuts, presentation by the Department of Public Services, nationwide strike (0101-JCVT-C01)

The rand weakened at the start of Wednesday's session, underperforming other EMEA currencies with the USD/ZAR briefly rising to 13.86 after it breached the 13.8524 resistance level. The currency was hurt by the fourth consecutive day of rotational power cuts by Eskom, aggravated by a presentation from the Department of Public Services, according to which the power utility would "cease to exist at the current trajectory by April" unless it receives the government's help as well as the nationwide strike by Cosatu in protest against job losses. We expect the rand to extend its losses in the near term due to power cuts as well as the planned strike by Cosatu in Cape Town on February 19, on the eve of the Budget Speech, with the USD/ZAR possibly surpassing the key 13.9515 resistance level.


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