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HSBC to SocGen See Bullish Rand Bets Sink Amid Power Outages

  • Blackouts raise concern about South Africa’s growth outlook
  • Rand plunges to weakest level since October 2020 versus dollar
Employees work in a unit lit only by natural light from skylights in Cape Town, South Africa in April 2022.

Employees work in a unit lit only by natural light from skylights in Cape Town, South Africa in April 2022.

Photographer: Dwayne Senior/Bloomberg
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Power outages in South Africa have caught rand bulls off guard, with at least three long-rand trades hitting stop-loss levels within a week as the rand tumbled to a 20-month low.

Societe Generale SA, Credit Agricole CIB and HSBC Holdings Plc recommended short-dollar positions versus the rand last week, citing supportive factors such as the central bank’s hawkish stance, relatively low inflation and an expected recovery in China’s economy that would boost demand for South Africa’s raw-material exports.