May 05, 2025
MyCURRENCY News | Week 18 2025
What we know
Last week, the Rand was able to make further gains against the Dollar, also recovering on the back of easing tensions between the US and China, despite Godongwana’s “third time lucky” approach to South Africa’s 2025 budget.
As China considers Trump’s offer to discuss a way forward regarding trade tariffs, the Dollar Index climbed back above 100, aided by strong jobs data on Friday that exceeded forecasts for the number of jobs added to the payroll.
The Rand gained 30 cents over the week, despite the Dollar regaining some ground across a range of currencies. This was partly due to an increase in global risk appetite, as traders became less concerned about the trade war, allowing flows into the Rand. Local news did little to support the Rand, with weak manufacturing data and the announcement that South Africa will receive its third proposed budget on 21 May.
Last week also saw the release of Eurozone and Australian inflation figures, both of which remained flat, while US GDP declined from 2.3% to -0.3% on a quarterly basis.
What others say
Reuters – Exclusive: Europe to hand billions in frozen Russian cash to Western investors, sources say
“The money will be used to compensate Western investors after Moscow seized cash held in Russia in recent months, three people said, escalating attempts by both sides to recoup billions in funds affected by the war in Ukraine.”
Business Tech – Edward Kieswetter kisses R100 billion goodbye
“Tax Justice South Africa founder Yusuf Abramjee said more than R100 billion in tax revenue is lost annually due to illicit trade, more than enough to compensate for the lost VAT increase.”
BBC – Warren Buffett, 94, stepping down as Berkshire Hathaway CEO
“I think the time has arrived where Greg should become the chief executive of the company at year end, said Mr Buffett, 94.”
What we think
Last week we said, “Volatility is expected to peak closer to the end of the week, as the US employment figures should provide the market with further insight into the current health of the US economy.”
The Impact of Friday’s employment figures were not what we would usually expect. Despite printing higher than the forecast, generally leading to a stronger Dollar, the Rand was able to hold firm at the best levels of the week. With no major economic releases justifying this resilience, we maintain the view that this is part of a continued market correction following the introduction of Trump’s tariffs.
This week, we look forward to interest rate decisions from the Fed and the Bank of England. While the Fed is expected to keep rates unchanged, a 25-basis-point cut is anticipated in the UK.
Our range for the week: R18.20 – R18.60.
Have a great week ahead.