October 27, 2025
MyCURRENCY News | Week 43 2025
What we know
In the absence of high-impact economic data from the US this week, trading between the Rand and the Dollar was relatively muted last week, remaining well within our projected range. It is not surprising that there was a lack of directionality in trading, as the market was not reacting to data releases and there was nothing driving sentiment from the US. Volatility was low, resulting in range-bound trading.
Locally, we saw the release of inflation data, which was broadly in line with forecasts. YoY inflation and YoY core inflation came in at 3.4% and 3.2%, respectively – both only 10 basis points higher than forecast. In the absence of any outliers compared to expectations, these releases had little impact on Rand–Dollar trading.
We also saw inflation releases internationally, with data from the UK, Canada, and the US. UK inflation (YoY) came in lower than expected, but in line with the prior figure at 3.8%. Following Wednesday’s release, the Rand made some gains against the pound, closing the week at a low of 22.98.
US inflation also came in softer than expected at a flat 3%, supporting the prospect of further interest rate cuts in the US. This news contributed to a strong close for the Rand on Friday.
What others say
CNN – US and China have reached a framework agreement on trade ahead of Trump-Xi meeting. Here’s what we know
“The apparent progress came during the first leg of Trump’s weeklong diplomacy tour in Asia, easing tensions between the world’s two biggest economies after weeks escalatory actions they slapped on each other.“
Business Tech – South Africa is off the grey list
“TSouth Africa has been taken off a global watchdog’s dirty-money list, providing a boost for increased foreign investment in Africa’s largest economy.“
Reuters – Fed poised to cut rates this week, with more easing likely on tap
“Federal Reserve policymakers are widely expected to reduce U.S. short-term borrowing costs this week by a quarter of a percentage point for the second time this year as they look to prevent further slowing in the labor market.“
What we think
Last week we said, “Federal Reserve policymakers are widely expected to reduce U.S. short-term borrowing costs this week by a quarter of a percentage point for the second time this year as they look to prevent further slowing in the labor market.”
Last week’s inflation data has cemented expectations of an interest rate cut, with 96.7% of market participants anticipating a reduction this Wednesday. Following Wednesday’s decision, there will be one interest rate decision remaining for 2025, and the consensus appears to be for a decrease at all remaining meetings this year, reducing the rate by 50 basis points before year-end.
Outside the US, several central banks are reviewing interest rates this week, including the Bank of Canada, the Bank of Japan, and the European Central Bank. Canada is projected to cut rates, following in the footsteps of the US, while the BoJ and ECB are expected to keep rates unchanged.
With South Africa’s next interest rate decision scheduled for 20 November, the increase in the rate differential could support rand strength in the short term, although the magnitude of cuts already priced in remains uncertain.
Our Range for the week: 17.05 – 17.45.
Have a great week ahead.