September 29, 2025
MyCURRENCY News | Week 39 2025
What we know
A midweek public holiday always results in the workweek feeling somewhat disjointed and can break one’s momentum. Last week’s ZAR/USD trading also saw a pause in momentum, although this had nothing to do with the midweek break. Trading opened at 17.32, and the ZAR managed to make gains early in the week, reaching a low of 17.20.
The Rand has benefited from significant momentum in the past few weeks, mainly due to USD weakness, but this momentum reversed on Wednesday. Bouncing off the 17.20 level, the Rand weakened to a high of 17.49 before recovering to close at 17.33.
Several factors contributed to the short-lived Dollar strength during the week. Firstly, on Friday, just as the Rand approached the 17.20 level, Fed Chair Jerome Powell stated that the Fed is in a “challenging situation” regarding interest rates, balancing inflation and employment. It was highlighted that, although forecasts point towards further cuts, the Fed will need to monitor its goal of keeping inflation under control.
On Thursday, US GDP data (QoQ) came in much stronger than forecast, which supported the Dollar. A final figure of 3.8% represents a substantial increase from 0.6% in the previous quarter and underscores why the Fed will closely monitor how rate cuts are affecting the overall economy. Personal Consumption Expenditure, however, remained flat MoM following the most recent rate cut.
What others say
Business Tech – Hope for AGOA, but maybe not South Africa
“AGOA expires on September 30 and companies that benefit from it have warned that any delay in renewing it risked significant job losses and factory closures.“
CNBC – Cleveland Fed’s Hammack warns of ‘challenging time’ amid inflation worries
“Cleveland Federal Reserve President Beth Hammack on Monday said the U.S. central bank faces challenges as it attempts to balance fighting stubborn inflation or protecting jobs.“
Reuters – Exclusive: OPEC+ plans another oil output hike in November, sources say
“OPEC+ has reversed its strategy of output cuts from April and has already raised quotas by more than 2.5 million barrels per day, representing about 2.4% of world demand, to boost market share and after coming under pressure from U.S. President Donald Trump to lower oil prices.“
What we think
Last week we said, “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.”
Although the GDP figure overshot the expectation by a healthy margin, and considering the Fed’s comments regarding rate cuts, the majority of the market is still pricing in another two cuts later this year. Should this prove to be an outlier release and inflation remains under control, we anticipate that the expected cuts will materialise at subsequent meetings.
Although generally a declining rate environment does not support a stronger currency, much of the weakness from rate cuts could already be priced in, which could lead to a muted impact when the cuts are implemented.
Next week, we look forward to inflation data from the Eurozone, but the focus will be on US employment figures to assess how well the Fed is managing its balancing act. Following two months of significant misses, where the actual figures fell well short of a low target, the market could prove volatile on Friday, regardless of whether the 33,000 target is exceeded.
Our range for the week: 17.18 – 17.50.
Have a great week ahead.