The USD to ZAR market is currently bearish.
Key drivers include:
- The Federal Reserve is expected to reduce interest rates further, weakening the USD.
- South Africa's economy is projected to grow modestly, supported by improved infrastructure and electricity access.
- A new inflation target of 3% set by South Africa's Finance Minister may stabilize the ZAR.
Over the next 1–3 months, the USD/ZAR is likely to remain steady within a defined range, reflecting its current price significantly lower than its recent average.
Upside risks include stronger-than-expected growth in the US, potentially bolstering the USD. Conversely, persistent weakness in commodity prices, particularly oil, could further depress ZAR, especially as it often moves in relation to oil trends.
As of now, USD/ZAR trades at 16.61, about 2.9% under its 3-month average.