The SARB's 25 bp repo rate hike last week to 6.25% was promising that ZAR/USD recovered from its lowest of 14.44, and it has outperformed most of its EM country currency peers in the week.

The increased currency volatility levels should be likely on the back of higher policy rates in the US, as per SARB's accompanying statement, and once again said that ZAR/USD is one of the biggest upside risks to its price stability.

Market participants are expecting a 90% probability of SARB's rate hike for a further 25 bp in January meeting. These anticipations could raise ahead of this week after the local Q3 GDP and October PPI data, which might give upward surprises.

"More specifically, we expect GDP growth to come in at 1.4% (q/q, SAAR), compared to a consensus and previous reading of 1.0% and  1.3%, respectively. We expect PPI inflation to rise from 3.6% y/y to 3.9% y/y, while the market has penciled in a more moderate 3.6% y/y growth rate", says Barclays in a research note. 

The ZAR might remain significantly vulnerable to the beginning of tightening by US central bank, it is advisable that ZAR investors continue to fade ZAR rallies into year-end. 

However, it wont be surprising if next week's local data provide an ideal opportunity for ZAR bears to reload at better entry levels.