July 28, 2025
MyCURRENCY News | Week 30 2025
What we know
The past month has been one of consolidation for the Rand, as the overall improved sentiment towards the currency remains intact. Against the USD, this consolidation has been reflected in continued trading below the significant 18.00 level (a level we haven’t seen since 23 June), with a couple of unsuccessful attempts to break below the 17.50 mark.
It’s important to distinguish this year’s bullish trend for the ZAR.USD (driven largely by ongoing USD weakness) from the losses we’ve experienced against both the GBP and EUR. Barring any unforeseen shocks (be they tariff-related, data-driven, or due to geopolitical events), it certainly seems possible that we could see further ZAR.USD retests of the 17.50 level. Conversely, the weakest levels seen in April’s trade against the EUR and GBP won’t be easily forgotten by traders.
Whereas historically the Rand has often been just ‘one-stupid-politician-opening-their-mouth’ comment away from a significant sell-off, things are currently quiet on the southern tip of Africa. Having moved past the budget announcement, the GNU kerfuffle, and Cyril’s White House reprimand, it’s a welcome relief to benefit, at least for now, from being the emerging market currency of choice.
While last week was quiet in terms of news and data releases, the week ahead promises to be anything but. Locally, we’re expecting inflation and trade data, followed by the Monetary Policy Committee’s interest rate decision on Thursday.
Importantly, we also need to remain alert to any headlines regarding trade and tariff agreements between ourselves and the US. As the 1 August deadline comes into view, any negative outcome could throw a spanner in the works of our relatively bullish ZAR outlook.
Globally, markets will be watching several key data points out of the US, including GDP figures, Non-Farm Payrolls on Friday, and (most crucially) the Fed’s rate announcement on Wednesday. With no change to the target rate being the slam-dunk bet this week, attention will be squarely on the tone and content of the announcement, as the market tries to gauge the likelihood of two cuts still being implemented by year-end.
Elsewhere, GDP figures from major European economies and the interest rate announcement from Japan will also be closely monitored.
What others say
Reuters – ECB rate decision as it happened: Rate unchanged at 2% as uncertainty remains over US-EU trade deal
“With inflation now back at the ECB’s 2% goal and expected to stay there, policymakers chose to stay put on Thursday, just as trade talks between the European Union and United States appeared to be in their final stretch. Reports have suggested a possible deal based on a 15% tariff on U.S. imports of EU goods.“
CNBC Africa – South Africa’s parliament passes last major budget bill
“South Africa’s lower house of parliament on Wednesday passed the last major piece of annual budget legislation, after the two biggest parties in the coalition government found common ground after months of disagreements.“
Moneyweb – ed is set for contentious debate as investors eye fall rate cut
“Fed Chair Jerome Powell is under intense pressure from President Donald Trump and his allies to reduce borrowing costs, and may face multiple dissents this week from officials who want to provide support to a slowing labor market.“
What we think
Last week, we said that“…market volatility should spike around key data releases, and any news drivers, local upsets, or geopolitical shifts will cause significant responses from the market.”
Apart from the fairly sharp rejection of the 17.50 ZAR.USD level (we’re currently at 17.85) there was little of interest in the market last week. In fact, even that move can be confidently explained as a pullback from the year’s best level, within the context of an ongoing bullish trend. As we alluded to previously, if ever there was an event calendar set to shake things up a bit, it feels as though this could be it.
Our range for the week is 17.50 – 18.00.
Have a great week ahead.