USDZAR - Forecast, Outlook and Market WatchHello fellow Market Watchers ☕
Today I'll take a top-view look at the USDZAR chart. And since I am in South Africa, this pair is of particular interest to me.
Now recently, the US introduced a 10% baseline tariff on most imports and lifted metals tariffs to 25%. Additionally, citrus, nuts, grapes and wine have been subjected to 30% duties since Aug. 7.
There is no doubt that in the short term, this will cause ripple effects throughout the economy but in the long run, South Africa will find new trading partners - this is how trade works. This will likely extend to Asian markets. The priority is to export more to China, where duty-free access has already been secured for five types of fruit (unsure which fruits these are).
South Africa will continue to strengthen ties with other countries to lessen reliance on the US for exports. Therefore, this is merely a short term hurdle.
From the monthly perspective, we see a clear peak. A double top marks the price where sellers are ready to dominate:
Although we've had two bearish micro-cycles (lasting just over two years and a year respectively), the multiyear trend has been bullish - almost "up only" since August 2011.
July US inflation cooled, so markets still expect the Fed to cut rates in September. Futures point to a strong chance of a 25 bps cut, and the dollar has lost some momentum. When rate-cut odds rise and inflation-adjusted US bond yields fall, higher-beta currencies like the rand often firm up.
However on a bullish note for the Rand, the South African Reserve Bank (SARB) cut the repo to 7.00% in July and said it aims at the bottom of the 3–6% target band, while June CPI printed 3.0%. This is optimistic news for the Rand, and further supports a decline on the chart.
What to watch next
• Fed path into September. Base case: a 25 bps cut.
• DXY (the US dollar index). Softer DXY tends to help ZAR.
• US real yields from the Treasury’s par real yield curve. Drifting lower is rand-friendly.
• Powell at Jackson Hole. A tougher tone on inflation could cap rand gains.
10 Year Treasury Inflation-Indexed Security - Lower US real yields usually lift demand for higher-yielding EM assets, leading to Rand strengthening.
DXY - A softer DXY = less broad USD strength, ZAR increases/strengthens
Gold and Platinum - If these increase, that supports SA's exports and likely helps the Rand considering the export volume. It should be noted that platinum gains will be limited by the new metal tariff at 25% if exporting to the US . In 2023, South Africa exported approximately $16.2 billion worth of platinum globally. Of this, about $3.42 billion went to the US. That works out to roughly 21% of South Africa’s total platinum exports being destined for the U.S.
I asked my friend GPT to put it in a table and got this helpful result:
So to summarize:
As of today (18 Aug 2025), markets still lean toward a Fed rate cut in September, with odds around the mid-80s, which has taken some heat out of the dollar and kept real Treasury yields anchored near ~1.9%—a mix that’s usually rand-friendly.
Locally, SARB’s July move left the repo at 7.00% while June CPI printed 3.0%, so South Africa still offers positive real carry. Firm gold prices and subdued equity volatility also help sentiment. The main offset is trade policy risk, with the new 30% US tariff on many South African imports clouding the export outlook and current account. Net-net, if US data stay calm into Jackson Hole, the bias tilts to a softer USD against ZAR.
