While the market remains mindful of ongoing capacity pressures, potentially risking a final rate hike (although, we assume that we are already at terminal), signs of a graduated upturn in leading indicators, allied to still elevated real yields and elevated spreads versus UST provide potential appetite for international investors.

Ongoing appetite for high-yielding paper, albeit that remains on the proviso that inflationary pressures remain contained, provides scope for USD/ZAR to correct towards August lows around 18.40 in Q1. 

USD/ZAR – Q4 2023: 19.15 | Q1 2024: 18.40