The ZAR to USD exchange rate is currently range-bound.
Key drivers include a growing interest rate differential as the South African Reserve Bank eases rates while the Federal Reserve hints at more rate cuts. Increased global commodity prices contribute to positive sentiment toward the ZAR. Additionally, South Africa's projected economic growth of 1.4% for 2026 is seen as supportive for the local currency.
In the near term, the ZAR is expected to trade within a relatively stable range as it sits at 90-day highs, approximately 3.6% above its three-month average.
Upside risks could stem from stronger-than-expected economic performance in South Africa or inflation remaining well-controlled. Conversely, downside risks may arise from geopolitical tensions or a quicker-than-anticipated pace of rate cuts from the Federal Reserve, which could weaken the USD further.