EUR/USD Firms on Carry Unwind, South African Rand (ZAR) Outlook Concerning


EUR: The Euro held up relatively well despite the rising spread of the coronavirus, which has impacted parts of Italy. Factors behind the resilient currency can be attributed to an unwind of carry trades, given the Eurozone negative rates. That said, with a lack of positive newsflow out of the Eurozone, EUR/USD has failed to make a firm break above the psychological 1.09 barrier.


Data provided by

of clients are net long.

of clients are net short.

Change in Longs Shorts OI
Daily -17% 6% -11%
Weekly -20% -5% -16%

ZAR: Today’s budget by the South African Finance Minister painted yet another gloomy picture for the South African economy, where the budget deficit for 2020 had been forecast to rise to a three decade, while GDP expectations has been slashed to 0.9%. However, with markets already anticipating a weak budget report, the ZAR firmed in response. Although, with Moody’s due to report on South Africa’s sovereign rating on March 27th, any reaction to the budget will likely be key for dictating price action in the Rand. Alongside this, despite the deep in USD/ZAR, the outlook remains higher amid the potential spill-over effects from the coronavirus spread. Reminder, Moody’s are the last rating agency to have South Africa’s sovereign rating in investment grade. As such, a decision to downgrade would place South Africa on junk status and thus spark outflows with IMF estimating around ZAR 17bln

AUD: Fresh multi-year lows for the Australian Dollar, which continues its descent to the low 0.65s. As risk appetite remains cautious and with domestic data showing little signs of encouragement, the rising threat that the RBA could reach the effective lower bound in 2020 sees the AUD underperform.

Source: DailyFX, Refinitiv

Economic Calendar (26/02/20)

EUR/USD Firms on Carry Unwind, South African Rand (ZAR) Outlook Concerning - US Market Open

Source: DailyFX,


  1. US Dollar Price Forecast: USD/CHF Points Lower, AUD/USD Nears 11 Years Low” by Mahmoud Alkudsi, Market Analyst
  2. USD/ZAR – US Dollar Nearing Important Test Against SA Rand” by Paul Robinson, Currency Strategist
  3. USD/MXN – Mexican Peso at Risk vs US Dollar, Peso Bulls Near Record” by Justin McQueen, Market Analyst

— Written by Justin McQueen, Market Analyst

Follow Justin on Twitter @JMcQueenFX

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