August 25, 2025
MyCURRENCY News | Week 34 2025
What we know
Last week felt as though the market was holding its breath in the lead-up to the Jackson Hole Symposium, as trading was limited to a very tight range, although the Dollar managed to creep up throughout. However, the tide turned in favour of the Rand following Powell’s dovish message.
The Rand–Dollar opened trading at 17.60 on Monday, and the Rand gradually slipped to a high of 17.76 on Thursday during four days of largely muted trading. On Friday afternoon, following Powell’s keynote at the biggest economic conference of the year in the United States, the Dollar took a plunge as investors were given the green light to move back into riskier assets, with Dollar rates set to fall.
Until recently, the Fed seemed focused on curbing inflation and was adamant that interest rates would not come down until this condition was met. The focus now appears to be shifting towards a dual mandate, which includes supporting the job market. This shift places the Fed in a tight spot, as lowering rates has conflicting effects on its two main objectives. Despite this balancing act, there is a soft confirmation that rates will be cut in September.
Locally, the market seemed unaffected by domestic inflation data released on Wednesday, and trading remained Dollar-driven.
What others say
Reuters – Major brokerages pivot to Sept Fed rate cut on Powell’s labor warning
“Major brokerages, including Barclays, BNP Paribas and Deutsche Bank, now expect a 25-basis-point U.S. Federal Reserve rate cut in September following Chair Jerome Powell’s shift in tone at Jackson Hole toward rising risks in the labor market.“
Business Tech – Kganyago explains why he went over National Treasury’s head on 3% target
“South Africa’s central bank chief Lesetja Kganyago doubled down on his preference for a 3% inflation target, arguing that a lower goal could improve the country’s risk profile, reduce debt levels, and curb price-growth volatility.“
CNBC – Higher tariffs are kicking in. Here’s what Walmart and other retailers said about their impact
“Tariff costs are rising for retailers, and they’ve had to get creative to avoid widespread price hikes.“
What we think
Last week we said that “Mixed inflation results had little impact on the probability of declining rates, reinforcing the view that interest rate cuts can be expected in September. As this environment brings [USD] weakness, it could provide the window that the Rand needs to settle below 17.50.”
As the saying goes, “Rome wasn’t built in a day”, but the Rand managed to break through the support level in late trading on Friday, closing at 17.45. This is the strongest level we have seen year to date and marks the first daily close below 17.50.
We can likely expect a market correction after the Rand’s run on Friday, but there is potential for the currency to remain strong and for substantial time to be spent below the 17.50 level in the coming weeks.
This week, we expect domestic PPI figures, with little significant news anticipated from foreign markets. The US will release QoQ GDP figures, followed by the Core PCE Price Index later this week. As the Core PCE Index strips out volatile elements, it provides a good indication of the overall price level.
Our range for the week: 17.30 – 17.60.
Have a great week ahead.