The AUD to ZAR exchange rate is currently range-bound.
Key drivers include:
- The Reserve Bank of Australia is expected to raise interest rates, which would support the Aussie. In contrast, the South African Reserve Bank recently cut rates, widening the interest rate gap between the two currencies.
- South Africa's economy is forecasted to grow, aided by better electricity supply and infrastructure, which could strengthen the ZAR.
- Inflation in South Africa is being targeted at 3%, which may encourage further monetary easing.
The AUD to ZAR is expected to trade within a stable range, slightly below its recent average.
Upside risks for the AUD could arise from increasing global demand for Australian commodities, while downside risks include worsening geopolitical tensions or economic slowdowns in China, which would impact the AUD negatively.