December 08, 2025
MyCURRENCY News | Week 49 2025
What we know
Last week started with fairly low volatility as the market ranged between R17.03 and R17.16 to the Dollar between Monday and Tuesday, but ended with the Rand running through the psychological level of R17.00 and printing its low at R16.90 on Friday. Last week was nothing short of spectacular for the Rand, as it had flirted with the R17.00 – R17.10 area over the course of October and November, and finally continued its run through this range during last week’s trading.
There were some key news announcements that supported the Rand in its strength last week. Our local GDP growth rate (Year-on-Year) was released on Wednesday and printed at 2.1%, which was significantly higher than the forecasted 0.4%. Further, Business Confidence on Thursday was released at 44 points, improving after two consecutive quarters of declining releases, with a jump from Q3’s yearly low of 39 points.
On the flip side, the USD weakened last week as traders continued to price in a US interest rate cut, with expectations now comfortably sitting at an 86% probability of a 0.25% cut in this week’s meeting.
With other global news announcements being relatively thin last week, correlated markets moved similarly to the USD.ZAR, and the Rand managed to gain against all major currencies.
What others say
Reuters – Dollar eases as investors gear up for tricky Fed decision
“The dollar eased on Monday, ahead of a week packed with central bank meetings and headlined by the U.S. Federal Reserve, where an interest rate cut is all but priced in, although a highly divided committee makes for a wild card.“
Moneyweb – Oil gains as traders weigh the next steps in Russia-Ukraine war
“Oil rose as traders weighed talks between the US and Russia that have so far failed to end the war in Ukraine, while attacks on Moscow’s energy assets continued.“
CNBC Africa – South African rand flat after Moody’s keeps the country’s rating, outlook steady
“Moody’s kept South Africa’s credit rating at Ba2 saying its decision reflected the nation’s “low growth potential”, while also leaving the outlook stable.“
What we think
Last week we said that…“Generally, the Fed will take into account the jobs market where weak labour figures may further support a cut. Given the absence of two months of data prior to the decision they are flying blind and there is a very outside chance they may decide to keep rates unchanged.”
Preliminary inflation expectations were released last week at 4.1%, compared with 4.5% previously, as well as a decline in the ADP non-farm employment figures, which printed at -32K. These data points support the market’s view of a highly likely 0.25% interest rate cut by the Fed in the upcoming meeting.
Apart from US interest rates, there will be releases this week for CHF, AUD and CAD interest rates, all of which are expected to remain unchanged; however, any releases outside of this should impact the relevant market.
There are no high-impact data points being released locally, and with that, the expectation of a US interest rate cut may allow the Rand to squeeze out another gain in the upcoming week.
A note of caution must be raised around the US interest rate cut, as what we often see is that when a market has been pricing in a highly probable interest rate cut, sporadic volatility may occur in the hours surrounding the announcement, as well as some adverse price moves; however, this generally settles after the market takes its direction.
Our range for the week: R16.70 – R17.05.
Have a great week ahead.