Welcome to another issue of our Weekly Rand Review.

And welcome to another week of Rand insights...

The past week was nothing short of dramatic for the Rand, as it managed to push to its best levels in 3 months amid budget deadlocks, tariff wars and stuttering peace talks...

...but then it all came unstuck with US non-farm payrolls triggering a sell-off, which was exacerbated by President Trump’s latest remarks about cutting US federal funding to South Africa, which sent the ZAR spiralling.

March madness certainly is upon us! Let’s see how it all played out.

Key Moments (3-7 Mar 2025):

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

• SA Budget Showdown:Budget impasse as coalition partners reject a VAT. GDP contracts while current account deficit narrows
• Tariff Tensions Escalate:Speculation over 25% tariffs on Mexico and Canada rattled global markets, raising fears of a trade war resurgence.
• Fed & ECB Hold Steady:Chair Powell & ECB signal wait-and-see stance on interest rates.
• Trump Remarks Hit Rand:The ZAR fell after President Trump announced plans to cut US federal funding to South Africa.

Rand Roars To 3-Month Best

The Rand opened the week at R18.65/$ after a torrid end to the prior one - and was soon on the back foot again, testing R18.70 as local manufacturing PMI data showed continued contraction 44.7 (down from the prior month's 45.3)...

...and as the market braced itself for the implications of US tariffs on Canada, Mexico and China...

...as well as political risks around the delayed budget - and the stuttering Ukraine/Russia peace talks.

But despite this all, the Rand not only managed to hold its own (closing around R18.57/$), but managed to drive home the advantage on Tuesday to close a full 14 cents stronger...

...but then weakened on the back of US President Trump's address to a full (and clearly divided) Congress that evening.

But the brief sortie above R18.50 was short-lived as the Rand quickly turned things around on Wednesday to close the day at an impressive R18.26 to the dollar...

...level last seen in December last year!

And it was just in time for our bi-weekly update for the next few days, which showed that the Rand could be expected to strengthen still further into the 18.22-17.98 area before bottoming out (see below)

Again, it looked like we were heading for an interesting end to the week, with a likely reversal on Friday...

...which so happened to coincide with the release of US Non-Farm Payrolls...

...would that be the only trigger?

And in other news...

Budget Delay VAT Hike Rift Continues

The delayed budget and rift in the GNU continued to fester, as the ANC pushed for a 2% increase in VAT to try and cover the ballooning budget deficit, with lessening tax receipts - and promises of more for free to the masses.

Is this even an option, with consumers already battling to make ends meet? Where will the money actually come from?

As we have quoted before, Maggie Thatcher put it a nutshell, "The problem with socialism is that you eventually run out of other people's money!"

All too true - especially when you are wasteful with it too!

Here is a suggestion: What about doing a DOGE audit on SA government expenditure and its various offices and state-owned enterprises instead?

I'll wager there may be enough to cover more than a 2% VAT hike...

...plus some!

Chances of this happening? Yes, about zilch!

Ukraine/Russia Closer to Ceasefire?

It would seem that pressure put on both sides by the Trump administration to bring about a ceasefire and an ultimate peace deal is bearing some fruit, despite another week of political jousting.

A cutting off of military aid on the one side and threatening of sanctions on the other has ending in planned meetings between US and Ukraine envoys in the coming week and a desire for peace by Russia.

Meanwhile, Europe leaders seem to be stepping up their war-mongering rhetoric, even as the new US administration drastically reviews its unilateral support for Ukraine and its unconditional protection of NATO allies...

A Whipsaw End...As We Expected

Getting back to the Rand, Thursday saw the Rand open at R18.26/$ and initially weaken but then plunged lower (stronger) after the ECB decided to keep rate steady, causing the US Dollar to lose value...

...with the Rand taking full advantage of this reaching R18.10 by the close, as the market squared up for Friday - and the biggie...Non-Farm Payrolls!

If you hadn't been privy to our forecast above, you could well have been fooled into thinking that Friday was going to be more of the same...

...as the Rand pushed even stronger to reach R18.04 before lunchtime.

But if you had been on the inside track, you would have expected an imminent reversal...

...and boy did we get one!

All it needed was US Non-farm Payrolls (often a trigger for a move) which came in less than expected at 151,000 but higher than the previous month, as data showed a shedding of federal workers but an encouraging increase in manufacturing hires.

The Dollar jumped...

...and once again, the Rand was caught in a Friday market sell-off, as it lost almost 30c in the next few hours...

...and then was given another knock as US President Trump again put his spotlight on South Africa and the government's Marxist policies and activities, as he announced a halting of all federal funding, and offering to those affected an invitation into the US with a rapid path to citizenship...

...something quite extraordinary, it must be said!

And with that, the Rand managed to eke out the week in the mid-R18.20s

(And in so doing, validated our forecast of a couple of days earlier 😃)

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The Week Ahead

With multiple events on the horizon, the Rand could see further volatility.

Watch the budget presentation (if it still happens) and global data releases and geopolitical events closely...

...but don't expect them to give you market direction!

For that, you need a scientific-based forward-looking objective view - like the one above!

Until next time, trade wisely!

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

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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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