Welcome to another issue of our Weekly Rand Review.

This week was another drama-filled one for the South African Rand...

...from an unprecedented budget delay that sent shockwaves through the market, to geopolitical shifts that kept local and global investors on edge, the currency faced significant volatility.

Yet, despite this all, the Rand found its footing in the second half of the week – recovering virtually all the ground lost.

Here’s how it all played out...

Key Moments (17-21 Feb 2025):

Some of the more critical factors affecting price action this week:

• Budget Postponement Shakes Confidence: The highly anticipated national budget was unexpectedly postponed due to disagreements over VAT
• Mixed SA Signals: Unemployment dipped slightly, while Retails Sales disappointed
• G20 Foreign Ministers’ Meeting: South Africa hosted the G20 meeting against a backdrop of tensions with the US

Cautious Start Amid Budget Anticipation

The Rand opened the week on a nervous note at R18.31/$. Things remained quiet until local trading desks opened, and then the volatility kicked in...

The currency spiked to R18.46/$ before managing a counterpunch that pulled the market back to close at R18.37/$, as traders positioned themselves ahead of the anticipated budget speech and key local data releases...

…and possibly more surprises out of the US.

Bumpy Ride as Unemployment Dips

Tuesday saw the market experience another bumpy ride, as it weakened in early trade with the Rand hitting R18.48 to the Dollar by mid-morning before the Rand managed to again pull back, closing out just below R18.40...

...as unemployment fell for the second successive quarter to 31.9% in Q4 2024, down from 32.1% in the previous three-month period, and the lowest since 3Q 2023...

…though let’s not forget, that’s the official unemployment figure

Budget Delay Sparks Market Jitters

This was the defining day of the week.

The Rand opened at R18.40/$, but news of the budget postponement sent shockwaves through the market...

..as disagreements over the proposed VAT increase exposed deep divisions within the Government of National Unity (GNU). This marked the first delay of its kind since the dawn of democracy—rattling investor confidence.

The market reacted badly, and the currency slumped to its weakest level of the week, with an intraday high of R18.59/$, which was not helped by Retail Sales coming in well below expectations at 3.1% YoY and declining 0.1% compared with a month prior.

Despite another afternoon recovery, closing at R18.50/$, the market mood remained tense.

And in other news...

Russia-Ukraine Peace Talks

The US and Russia initiated peace discussions aimed at resolving the Ukraine conflict, albeit without direct Ukrainian representation, increasing tension being seen in statements between President Trump and Ukrainian President Zelensky.

US Stocks Tank, Gold Hits New Highs

US stock markets faced their worst trading day of 2025 as Dow Jones dropped more than 700 points, bringing its two-day losses to more than 1,200 points, raising fears about prolonged high interest rates...

...while Gold continued to push higher still, hitting a new all-time high of 2956!

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G20 Diplomacy Offers Temporary Relief

Getting back to the Rand...

The Rand opened at R18.50/$, and showed early weakness as anxiety continued in the market following the budget delay as the market hit a high of R18.56 in early trade.

However, South Africa's hosting of the G20 foreign ministers’ meeting seemed to shift attention temporarily, despite US Secretary of State Marco Rubio's notable absence..

Rubio's reasons?

A protest against the recent expropriation bill being signed into law, using the G20 to promote DEI and climate change ('solidarity, equality, & sustainability') - agendas that have been all-but eradicated in the US the last month, and 'anti-Americanism'.

Despite the geopolitical tensions, the Rand reversed course dramatically, plunging lower as the USD/ZAR pair fell sharply. By the close, the currency stood stronger at R18.31/$, buoyed by improved sentiment.

Stabilization After a Turbulent Week

And all too quickly, we were again at the end of the week!

And for once, Friday was a more muted affair for the local currency, displaying relative calm after a week of heavy volatility.

A moderate rally saw the currency reach a high of R18.39/$, before easing off slightly to close in the mid R18.30s to wrap up another event-filled week.

Although this was less volatility than we have seen...

...as can be seen above, these are still significant risks - for gains and losses

The question is: How are you managing these risks and exposures?

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- and how to use this to advantage?
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The Week Ahead

And before you know it, we are into the last week of February!

Not a whole lot in terms of economic data, apart from local inflation figures and balance of trade report - and of course, the postponed budget speech still looms!

Globally, geopolitical events will likely dominate again, with ongoing Ukraine peace talks and the escalating tariff wars making headlines…

…as the Trump administration barrels into its second month of drastic policy reforms and aggressive trimming of the US’s bloated federal bureaucracy.

As for us, we will instead continue to look to what the charts and sentiment cycles themselves are telling us. - and I recommend you do the same!

To give you a little helping hand, feel free to take our Rand forecasting service for a test-drive!

This will give you access to the same charts that help guide us and our clients with the likely direction of the Rand - ahead of time, enabling us to make educated and informed decisions.

Simply use the link below to get access now.

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If you have any questions or feedback, please leave them below.

To your success~

James Paynter

P.S. Worrying about how to in manage your Rand exposures this year? Email me or give me a call on (041) 373-6310 or (087) 551 2848 - we would love to help.

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