July 16, 2025
MyCURRENCY News | Week 28 2025
What we know
The Rand came under sustained pressure last week as the US Dollar showed some signs of life, strengthening against most currencies. After opening near R17.56/USD, the Rand weakened further as the Dollar gained momentum, with USD/ZAR closing the week at R17.92, driven by a strong reaction to US tariffs and safe-haven demand. The Dollar Index approached 98.0 on Friday, its highest level of the month.
A key driver of the Dollar’s strength was the renewed focus on US tariffs. The US administration advanced plans to impose tariffs on a range of countries, including a 30% tariff on South African exports, a move that heightened global trade tensions. As markets typically turn risk averse during such periods, capital flows into the US Dollar increased, which remains one of the world’s most liquid and globally dominant currencies.
The GBP came under pressure on Friday following UK GDP data showing a 0.1% contraction in May, extending the economic decline from April’s 0.3% drop. The industrial sector’s poor performance, with faster than expected declines in industrial and manufacturing production, contributed significantly to the slowdown.
What others say
Engineering News – South African exports to America could slump by up to $2.3bn under new tariffs
“Econometric modelling of the impact on South Africa of US tariffs – including the proposed 30% reciprocal tariff on all non-exempted goods, the 25% tariff on automotives and automotive components, and the 50% tariff on steel, aluminium and copper – indicates that yearly South African exports to America could decline by between $1.4-billion and $2.3-billion.“
Reuters – Oil falls as Trump gives Russia 50 days to avoid new sanctions
“Oil prices nudged higher on Monday, adding to gains of more than 2% from Friday, as investors eyed further U.S. sanctions on Russia that may affect global supplies, but a ramp-up in Saudi output and ongoing tariff uncertainty limited gains.“
ING – Our latest views on the major central banks
“Our take on what could be next for the Federal Reserve, the Bank of England, the European Central Bank and the Bank of Japan over the coming months.“
What we think
Last week we said that “Amid ongoing tariff uncertainty, as the market awaits the finalisation of details around US tariffs, there has been no clear indication of how the market will respond. However, market participants appear to be favouring emerging markets over the traditionally safe-haven Dollar.”
Evidently, investors favoured the US Dollar last week, where it outperformed not only most emerging market currencies, but also both the Euro and the British Pound. While the outperformance against EUR and GBP can be mostly attributed to domestic drivers, a renewed shift towards a risk-off sentiment among investors was apparent.
Should risk-off sentiment continue into the week ahead, the USD/ZAR 18.00 resistance level could prove pivotal. The Rand’s strength against the US Dollar will be monitored closely, as escalating trade tensions with continued tariff negotiations are expected to take centre stage.
This week, key US CPI (inflation) figures are due to be released on Tuesday, with UK inflation numbers following on Wednesday. On Thursday, markets will be watching the UK unemployment rate, offering further insight into the Bank of England’s policy outlook.
Our range for the week: 17.80 – 18.20.
Have a great week ahead.