SSA Currencies: A Pause In The Bull Run

Our bullish view on Sub-Saharan African (SSA) FX has played out well over the past couple of months, with the high-yielders such as the Zambian kwacha and the Ugandan shilling having seen especially strong appreciation. Now, however, we are putting those bullish views on hold, expecting a period of short-term range trading and consolidation based on the technical pictures as well as tentative signs that the US dollar will enjoy some respite. We still believe that the gains for SSA currencies have further to run over the medium term, though. Once the aforementioned period of consolidation passes we see scope for further appreciation, provided that global risk appetite is maintained and key technical resistance levels are surpassed.

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