Barclays_FX_Views_PEN_and_ZAR_A_tale_of_two_gold_miners

This document is intended for institutional investors and is not subject to all of theindependence and disclosure standards applicable to debt research reports prepared for retailinvestors under U.S. FINRA Rule 2242. Barclays trades the securities covered in this report for itsown account and on a discretionary basis on behalf of certain clients. Such trading interestsmay be contrary to the recommendations offered in this report.Please see analyst certifications and important disclosures beginning on page 7.FX ViewsPEN and ZAR: A tale of two goldminersGold is likely to remain in a bull market, which should providea fundamental boost to the PEN and ZAR. Gold caught up tocopper in Peru's exports, lifting the PEN's fair value.Meanwhile, it has decreased the ZAR's sensitivity to globalrisk, enhancing its attractiveness as a carry trade.• The bull run in gold has brought gold-sensitive EM currencies into focus, namely the Peruviansol and South African rand. Gold's share of total exports has surged in Peru (boosted by priceand quantity increases), now virtually matching the value of its copper exports. This is notminor for the PEN, as both metals have fundamental support in the current environment andthe currency has moved closely with terms of trade this year.• Our BEER model suggests that stronger terms of trade have pushed the model-implied fairvalue of the PEN meaningfully higher. We still see room for the PEN to appreciate in thisenvironment. The BCRP could buy USD in the spot market, but this does not seem to be amajor risk just yet, as reserves are on the high side.• The ZAR has been more more erratic to terms of trade than the PEN. Unlike Peru, South Africahas reduced its gold extraction over time. Our long-term USDZAR misvaluation model, whichcontrols only for the broad USD and global carry sentiment, does not suggest any valuationdistortion due to the gold price surge.• However, the ZAR benefits from gold-driven terms-of-trade improvements more indirectly, inour view. Rather than strong ZAR appreciation, we have observed a decrease in the ZAR'ssensitivity to global risk factors. This effect should enhance its attractiveness as a global carrydestination.PEN and ZAR: A tale of two gold minersThe PEN and ZAR are the main gold proxies in EM FXGold has been a stand-out performer this year. Despite the recent correction, we think the bullmarket still has legs and that gold can sustain a sizable premium going forward (see this note).The PEN and the ZAR screen as the best gold proxies in the EM space, as Peru and South Africaare two of the world's leading gold producers and export enough quantities of gold material toaffect their terms of trade. Both currencies have experienced a considerable tailwind from goldFICC ResearchFX Strategy27 October 2025SIGNATUREErick Martinez+1 212 526 9380erick.martinez@barclays.comBCI, USMarek Raczko+44 (0) 20 3134 0089marek.raczko@barclays.comBarclays, UKAndrea Kiguel+1 212 526 8954andrea.kiguel@barclays.comBCI, USLef