AUS
NZ
UK
CA
USA
FRA
GER
ESP
ITA
NLD
PRT
SWE
GRC
IND
POL
BRA
ZAF
RUS
CHN
UAE
_06_19_2025_05_49_07_385844.jpg)
The USD to South African rand (USD/ZAR) price retreated in June as I predicted in this report. After soaring to a record high of 19.91 in June, the pair dropped to a low of 18.14. Despite the brief pullback, it remains 12% and 30% above its highest point in January 2023 and March 2022, respectively.
Is the South African rand comeback over
The South African rand had a strong performance in June as the country’s central bank and the Fed diverged. In its decision, SARB decided to hike interest rates to 8.25% while the Fed left interest rates unchanged. SARB’s 50 basis point rate hike in June was higher than what analysts were expecting. It was also the tenth straight rate hike.
Now, the bank believes that inflation is slowly turning the corner. In a statement on Tuesday, the head of the country’s central bank said that consumer and producer prices were starting to fall. It dropped to 6.3% in May after peaking at 7.8% in the previous month and he expects it to come within its range later this year.
The USD/ZAR price also dropped even as geopolitical risks continued. In a statement, the US warned that South Africa had supplied weapons to Russia as the war in Ukraine continued. As such, some analysts predicted that the country would be sanctioned.
Looking ahead, the next key catalyst for the USD to ZAR price will be the upcoming minutes of the Federal Reserve. These minutes will provide more color about the deliberations in last month’s meeting.
The pair will also react to the upcoming US non-farm payrolls (NFP) data scheduled for Friday this week.
USD/ZAR forecast
The USD to rand exchange rate had a pullback in June. This drop saw it move below the 23.6% Fibonacci Retracement level on the daily chart. It now remains above the 100-day exponential moving average and the ascending trendline shown in orange.
The pair is also hovering at an important level, which was the highest points in October last year and March 2023. I believe that the pullback is now complete and the pair will likely resume the bullish trend as buyers target the next key resistance point at 19.91, the highest point on May 31st.
The post USD/ZAR: Is the South African rand comeback over? appeared first on Invezz.