USD/ZAR slips to 14-week low with CPI, Fed minutes in focus

The USD/ZAR currency pair hovered just above a fresh 14-week low on Tuesday as market players awaited the key US CPI report that may provide further clues on the timing of the Federal Reserve’s first rate cut.

Another highlight this week will be the minutes of the Fed’s policy meeting in March, to be released on Wednesday.

Annual headline consumer inflation in the United States probably picked up to 3.4% in March, according to market consensus, from 3.2% in February.

Annual core CPI inflation probably eased to 3.7% in March from 3.8% in February – an almost three-year low.

US Treasury yields rose as market players trimmed bets on the pace and scale of Federal Reserve rate cuts this year.

Markets are now pricing in about a 44% chance of a Fed rate cut occurring in June, compared with 60% a week ago, according to the CME FedWatch tool.

About 60 basis points of rate cuts are now priced in, compared with 75 basis points projected by the Federal Reserve.

In other data, Rand traders will be paying attention to South African mining and manufacturing production figures for February due out on Thursday.

Currency Pair Performance

As of 9:04 GMT on Tuesday the USD/ZAR currency pair was losing 0.70% to trade at 18.5088.

Earlier in the session, the exotic Forex pair went down as low as 18.5010. The latter has been the pair’s weakest level since January 3rd (18.4923).