The AUD to ZAR market bias is currently range-bound.
A key driver is the interest rate differential, as the Reserve Bank of Australia (RBA) is expected to raise rates, while the South African Reserve Bank (SARB) has eased monetary policy by reducing rates. Risk sentiment remains crucial, especially regarding the outlook for commodities; the Australian dollar is a commodity currency, tied to resource prices, while the South African rand can be influenced by oil prices. Recent trends show oil prices are below their three-month average, affecting the ZAR's performance. Additionally, South Africa's projected economic growth for 2026 supports a cautious outlook for the rand.
The near-term trading range appears stable due to recent movements, with the AUD to ZAR trading closely to its average. Possible upside risks include stronger-than-expected commodity prices bolstering the AUD. Conversely, a significant downturn in global risk sentiment could negatively impact both currencies, especially the AUD.