September 22, 2025
MyCURRENCY News | Week 38 2025
What we know
The market stayed within the forecast range for last week, between R17.25 and R17.55 to the Dollar, with several key factors driving exchange rates on both sides of the band. Volatility remained low throughout the week, with a brief uptick during high-impact news releases.
On Wednesday, local inflation figures were released, showing that both Year-on-Year and Month-on-Month inflation had decreased. This signalled the SARB’s ability to keep inflation under control and, following through on this, local interest rates were kept at 7% on Thursday, which supported positive Rand sentiment during the week.
Strong US retail figures were released on Monday, but the market largely shrugged them off, with US interest rates expected to decrease on Wednesday evening. As forecast, the US cut its interest rate by 0.25%, which triggered a sharp spike in volatility and saw the USD/ZAR exchange rate trade at the year’s best levels once again, at R17.25 to the Dollar.
Last week was very much interest-rate focused, with Canada reducing its overnight rate by 0.25% and the UK holding rates steady at 4.00%.
What others say
Reuters – China keeps lending rates unchanged in Sept as trade tensions ease
“China kept its benchmark lending rates unchanged for the fourth consecutive month in September, in line with market expectations, following the central bank’s decision to hold a main policy rate steady last week“
CNBC – South African minister meets US representative in push for trade deal
“U.S. President Donald Trump imposed a 30% tariff on imports from South Africa last month after President Cyril Ramaphosa’s government made several unsuccessful attempts to secure a trade agreement“
Moneyweb – Gold hits fresh record as traders wait for US rate-path clues
“Gold hit a fresh record amid growing optimism about the outlook for US monetary policy, as investors looked ahead to a key inflation print that may give policymakers room to lower rates. Silver extended gains to reach the highest in more than nine years.“
What we think
Last week we said, “With the Fed meeting scheduled for Wednesday this week, it is reasonable to expect a 0.25% interest rate cut. The market has already priced in this expected cut and, as we have seen in the past, when the market prices in an interest rate cut ahead of time there may be an adverse reaction on the day.”
As volatility picked up on Wednesday evening, the market witnessed an adverse reaction, trading to the week’s high of R17.48 immediately after reaching the week’s low of R17.25.This suggests that the US interest rate cut may have been over-priced by the market, providing grounds for a potential correction going into this week.
While sustained pressure on the Dollar cannot be ruled out, there are no immediate headlines to support this view. Instead, the market will be looking to the US GDP figures due for release on Thursday to gauge whether US production is increasing, as this will serve as a useful indicator of what to expect going forward now that borrowing costs have decreased.
Our range for the week: R17.25 – R17.60.
Have a great week ahead.