March 02, 2026
MyCURRENCY News | Week 8 2026
What we know
The Rand traded in a relatively narrow range last week against the US dollar, especially considering that Enoch Godongwana presented the budget speech on Wednesday, as well as the announcement of several US economic releases. The Rand hit its weakest level on Tuesday at USD/ZAR 16.05 and moved to its strongest level of around USD/ZAR 15.82 after the well-received budget speech on Wednesday, before closing the week at USD/ZAR 15.92.
During the budget speech, it was announced that, for the first time in 17 years, national debt is expected to stabilise. Inflation was also projected to average 3.4% in the year ahead. These key headlines should boost investor confidence but would likely result in the SARB lowering the interest rate further. In addition, there were some positive adjustments for taxpayers. Most significantly from our clients’ perspective is that the single discretionary allowance has increased to R2 million for South African residents.
South Africa’s producer price inflation (PPI), released on Friday, contracted by 0.2% month-on-month in January. This reinforced the view that price pressures remain subdued and aligns with expectations that inflation risks are currently well contained.
In contrast, core PPI in the US was substantially higher than the expectation of 0.3%, with core PPI rising by 0.8% month-on-month in January. The inflationary uptick should have come as no major surprise, as President Donald Trump’s State of the Union address, delivered on Tuesday, outlined the balancing act of tax cuts alongside aggressive trade protection, which markets typically view as a recipe for persistent inflation.
Geopolitical tensions in the Middle East escalated over the weekend following joint US and Israeli strikes on Iran, triggering retaliatory attacks across the Gulf region. This was followed by the death of Iran’s Supreme Leader, Ayatollah Ali Khamenei, which has significantly heightened political uncertainty. These developments have raised fears of further escalation in the Middle East. Additionally, there are rising tensions between Pakistan and Afghanistan.
Markets have responded by moving towards safe-haven assets, as uncertainty around Iran’s response has lifted near-term volatility. As a result, risk sentiment remains fragile, leaving emerging-market currencies exposed to headline risk.
What others say
The Guardian – Oil prices rise and stock markets dip as Iran war threatens global economy
“Brent crude up 13% in early trading with markets under pressure as US-Israeli strikes on Iran effectively close strait of Hormuz to shipping.“
Business Tech – South Africa is turning the corner for the first time in 17 years
“Finance Minister Enoch Godongwana says South Africa is finally seeing a shift following over a decade of financial struggles, with debt now stabilising after 17 years.“
Reuters – Fresh Middle East curve ball raises risks for weary world markets
“Conflict in the Middle East has moved from a fringe risk to a top worry for investors unsettled by the prospect of a power struggle in Iran and a protracted regional war, with ramifications for everything from global trade to inflation.“
What we think
Last week we said that, “… USD/ZAR remain(s) anchored near the psychological 16.00 level as markets await further clarity on global monetary policy and economic conditions.”
USD/ZAR remained surprisingly resilient last week, hovering around the 16.00 level. However, the week ahead will likely be quite different from this. This morning, we have seen USD/ZAR touch as high as 16.20 from Friday’s close of 15.93. Gold will likely continue to tick upwards, offering the Rand some form of support. Having said this, the Rand obviously remains a risky asset, and as investors will likely move more towards a risk-off sentiment in the week ahead, the Rand will certainly feel the impact of that.
In the week ahead, we have core inflation data coming from the US on Wednesday, alongside non-farm payrolls on Friday.
Locally, we have gold, mining and production figures for January being released on Thursday, as well as the current account figure for Q4, also being released on Thursday.
If and when the fog of war starts to lift, the market will continue to give us signals as to how the conflict may intensify or de-escalate, as well as expectations regarding its likely duration. Our view is that, outside of its terror proxies, Iran’s geopolitical isolation increases the likelihood that the US and Israel may be able to achieve their objectives sooner rather than later. Should this be the case, this conflict may turn out to be short-term pain for long-term gain, en route to a more stable and prosperous Middle East.
Our range for the week: 15.95 – 16.30.
Have a great week ahead.