April 22, 2025
MyCURRENCY News | Week 16 2025
What we know
Last week’s trading was fairly flat as the Dollar came to a standstill after aggressively weakening throughout April. The Rand managed to etch out a small gain, opening trading last week at R19.07 and closing at a rate of R18.80 to the Dollar. With that said, the Rand is not in the clear yet; however, it is trading comfortably back inside its 2023 – 2024 range.
As news events were scarce last week, most of the Rand’s trading (or lack thereof) resulted from low volatility, which is typically the case after the currency has experienced wide trading ranges of 7% to 12% against various hard currencies.
The balancing act between local and offshore factors continues. The uphill battle the Rand faces is declining local sentiment due to the GNU being on the brink of separation. This puts the currency at risk, as any hawkish policy releases out of the US are likely to push the Rand weaker.
From a news standpoint, UK and Canadian inflation figures were released softer than expected, as global inflation continued its downward trajectory. On this point, the EU had its interest rate decision, resulting in a 25-basis point cut from 2.65% to 2.40%. The ECB emphasised that this cut was due to cooling inflation and their inflation outlook going forward.
What others say
Reuters – US stocks nosedive as Trump harangues Powell
“Trump repeated his criticism of Powell, saying in a Truth Social post that the economy could slow down unless interest rates are lowered immediately.”
Moneyweb – Godongwana sees no alternative to Vat increase
“The objection of the business-friendly DA has called the survival of the GNU into question, pressuring the rand as investors assess whether its departure from the coalition would open the door for the left-leaning Economic Freedom Fighters to enter government.”
CNBC Africa – Global trade outlook has ‘deteriorated sharply’ amid Trump tariff uncertainty, WTO warns
“The WTO also warned that “severe downside risks exist,” including the application of “reciprocal” tariffs and a broader spillover of policy uncertainty, “which could lead to an even sharper decline of 1.5% in global goods trade,” particularly hurting export-oriented, least-developed countries.”
What we think
Last week we said, “Provided we can keep our government together, keep the imposition of tariffs at bay, and maintain electricity supply, we can begin to be hopeful – although rebuilding investor confidence may be slow.”
The above factors will be the main point of focus going into this week. If the USD remains weak, this could allow increased local sentiment to edge us toward the lower R18 levels against the Dollar.
This week is quiet in terms of news releases, with a range of Manufacturing and Services data being released from the US, UK, EU, and Canada. These should all provide a spike in volatility around the time of the announcements.
Most of the Rand’s movement this week could potentially be a market correction after the recent heavy move to all-time highs.
Our range for the week: R18.20 – R18.90.
Have a great week ahead.