EM currencies gain on USD weakness

Stock market session has been rather calm so far and things look similar on the FX market... at least when it comes to major currencies. USD is among the weakest G10 currencies and EM currencies greatly benefit. The Fed remained dovish, declining US yields make the US dollar less attractive compared to EM currencies. Turkish lira and South African rand are among top performers. TRY trades 1.1% higher against USD while ZAR gains 1.3% against greenback. Hungarian forint (HUF) gained 0.8%. There are also some country-specific reasons behind the outperformers. Hungarian central bank has launched a rate hike cycle, benefiting the currency. Lira got a lift after data today showed that Turkish manufacturing PMI reached a 6-month high at 54 pts in July. ZAR is recovering from a recent drop caused by uncertainty over social unrest. South African rand is also supported by pick-up in gold price. However, the major factor benefiting those currencies is the weakness of the US dollar.

USDZAR is dropping following a recent upward move, triggered by social unrest in South Africa. The pair dropped below the lower limit of the Overbalance structure as well as the 100-period EMA (H4 interval) that acted as a support before. The pair is currently testing support marked with 38.2% retracement of the recent upward move. Source: xStation5