This is the current USD-ZAR mid-market exchange rate. The Total Cost of buying foreign currency in the above table is calculated as the sum of all fees and the exchange rate margin, which is the difference between the provider's exchange rate and the mid-market USD-ZAR exchange rate.
Whenever you are researching a particular exchange rate you are actually interested in two currencies as the value of a currency must always be quoted relative to a second currency.
So it follows that if you are determining the best time to transact, in this case the USD vs ZAR, you should pay attention to both United States Dollar and South African Rand news and forecasts.
In the third week of April the Dollar Index was rallying strongly towards the mid-97s, slightly below major resistance at 97.70, a break of which would be massively positive for the greenback. The index was up 1.7 percent year-to-date.
The dollar’s strength comes in spite of a dovish surprise in March from the Federal Reserve, which ditched two interest rate hikes from its 2019 projections. Fortunately for dollar holders, the rest of the world has problems and other important central banks also turned dovish, removing much of the incentive for selling USD.
Bloomberg research warned in April of potential for a large upcoming move in the US dollar, up or down. Over the past quarter-century, three prominent troughs in the JPMorgan Global FX Volatility Index were followed by dollar moves over 6-month periods worth 10-15 percent. The index was trading in mid-April at a 5-year low.
2018 was a grim year for the rand: it lost 14 percent of its value against the US dollar and lost nearly 10 percent against the euro.
The rand started 2019 with a bang but began to falter in the latter stages of January after the South African Reserve Bank pointed to significant improvements in the inflation outlook and indicated that this meant it had less of an incentive to raise interest rates. The SARB predicted only one further increase in rates between now and the end of 2021, down from a predicted three increases in November.
At the time of writing (March-23), at an exchange rate of R14.5 per USD, the rand was bang in the centre of its September-January uptrend against the dollar, and similar could be said versus the euro (R16.4 per EUR).
This May’s general election might add some currency uncertainty given the divisions within South Africa's ruling ANC party but once the election dust has settled the rand will have benefitted, thinks a Standard Bank analyst, due to the “much-needed policy reforms” that the election will facilitate.
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