FxWirePro: EMFX radar - ZAR banks on S&P and Moody’s ratings, crude unlikely to cushion MXN and BRL still seems fragile on political turmoil

The ZAR has been the big winner in the recent times, which bounced back sharply after tumbling last Friday. The market was braced for a credit rating downgrade, and when they ‘only’ downgraded to ‘junk by S&P, with Moody’s holding off for now, that was enough for short-covering ahead of the ANC Congress to elect a successor to President Zuma. The rest of the CEEMEA moves are pretty small.

Asia’s currencies have had a quiet week. PHP has had a nice rise since releasing strong Q3 GDP data a fortnight ago and weren’t hurt by strong PMI data today. MYR was the only Asian currency stronger than the PHP in November and carried on the strong trend, while the rest of the Asian bloc is pretty range bound.

Latin America has suffered from risk aversion. Higher oil has made no difference at all as recent gains are partially unwound. Oil and domestic politics were both helping MXN in November, but it’s slipped this week, and Brazil too is suffering from political concerns, though neither has come close to the problems of the Chilean peso, where soggy growth and the wait for a runoff in the Presidential election race (on 17 December are weighing on confidence).