The Canadian dollar (CAD) has recently experienced downward pressure primarily due to declining oil prices, a critical factor since Canada is a significant oil exporter. As of October 19, 2025, the CAD traded at 12.35 ZAR, which is 1.9% lower than its three-month average of 12.59 ZAR, indicating a relatively stable trading range between 12.27 and 13.16 ZAR over the past months.
Analysts attribute part of the CAD's challenges to recent reports suggesting a contraction in the Canadian economy, negating some stability provided by Federal Reserve hints at potential rate cuts. Such speculation has buoyed the CAD against the U.S. dollar; however, concurrent weakness in oil prices, hitting five-month lows at 65.07 USD, has weighed heavily on the loonie. This decline in oil was driven by global oversupply concerns and ongoing trade tensions, particularly with the U.S. and China.
The South African rand (ZAR) has similarly navigated turbulent waters amid global geopolitical tensions, particularly U.S.-China trade strains that elevate the quest for safe-haven assets, often at the expense of emerging market currencies like the ZAR. Domestic factors, including a surprise drop in inflation to 3.3% in August, has fueled speculation regarding potential interest rate cuts by the South African Reserve Bank, although rates currently remain steady at 7%.
As both currencies are intricately linked to global commodity prices and influenced by domestic economic signals, the outlook remains complex. For the CAD/ZAR exchange, the combination of falling oil prices and uncertain economic projections in Canada reflects a challenging environment. Investors should remain vigilant to shifts in oil market trends, central bank policies, and geopolitical developments, which could further impact these currencies in the near future.
