Another week, another rollercoaster for the Rand!
Welcome to another week, traders and Rand watchers..
...hope you’re surviving the financial rollercoaster!
The Rand had a choppy ride this week as central banks kept rates steady amid growing uncertainties. Inflation held firm, and retails sales surprised - but mixed data left the market direction as clear as mud.
Let’s break down what went down, why it matters, and what’s lurking on the horizon…
Market Pulse 📊
Key Moments (17-21 Mar 2025):
Some key headlines from the week:
- Inflation Holds Steady: February inflation stayed at 3.2%, providing some respite from cost pressures but leaving little room for rate cuts.
- Retail Sales Surprise: Local Retail Sales surged by 7% in January, smashing expectations
- Central Banks Hold Rates: SARB, the Fed and BoE all held rates steady as inflations fears persist.
- Average Daily Range: 17c or 0.9%
Equating to a potential profit/(loss) of R9,000 every day for every R1 million exposure - Weekly Range (total fluctuation): 28c or 1.5%......
...equating to a saving or loss of R15,000 for every R1 million exposure simply by taking action at the right or wrong time...
Rand Gyrates Ahead of Interest Rate Decisions...
The Rand opened the week at R18.19 coming off the back of an impressive prior week...
...and after a brief test higher, the Rand continued looking strong out of the gate, as it drove the market lower throughout the day to close out the day around R18.06/$!
Not too shabby for a Monday!
And Tuesday looked like the trend was going to continue as the Rand dipped briefly below R18.00/$...
...but that was as far as it was going to go, as the market reversed strongly, touching R18.16 before ending around R18.12 to the US dollar, as traders positioned themselves ahead of the Fed's interest rate decision on Wednesday.
Then Wednesday opened with the Rand immediately under pressure, shooting all the way up to R18.28/$ before lunch, with local data releases throwing in a curved ball.
Inflation came in steady at 3.2%, slightly lower than expected, but it was SA Retail Sales that really stole the show, smashing expectations of a negative 1.8%...
...with an impressive 7% year-on-year growth, compared with the previous month's 3.2% results.
This triggered a sharp reversal, as the Rand pushed stronger through the balance of the day to close out around R18.08/$, with the Fed’s rate decision to hold rates not having any real impact, except to attract some ire from Trump, realizing that higher interest rates throttle much-needed business growth...
And in other news...
- War Ceasefires Hit Hurdles
The ceasefire in the Israel/Gaza conflict came to an abrupt halt after Hamas failed to comply with hostage release demands, while it seemed Russia/Ukraine conflict is edging closer to a peace deals as US envoys talk to both sides, but it seems there will be a few hurdles to overcome before we get there.
JSE Hits All-Time High as Global Stock Markets Recover
The JSE hit a record high which coincided with some recovery in global stocks after the prior week's collapses, but the outlook remains very uncertain, as these market continue to show signs of severe underlying weakness in momentum.
Bottomline: It is only a matter of time before the bubble pops!
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Whipsaw Action Continues...
Thursday was a bit of a letdown for Rand bulls, as the market was drive higher ahead of SARB and Bank of England rates decisions, touching R18.24 by early afternoon...
The SARB held its rate at 7.5%, as expected, but the lack of any strong forward guidance made it clear that the central bank wasn’t about to rock the boa, while the Bank of England also played it safe, keeping rates at 4.5% – no fireworks there either...
...it was as if the whole world’s central banks decided to hit the pause button at the same time!
The Rand managed to turn these non-events into some Rand strength in later trade, managing to test R18.10 before closing slightly higher.
Friday brought a bit of a gut punch, as U.S. existing home sales data came in stronger than expected, and the Dollar flexed its muscles.
The Rand couldn’t keep up and gave all the ground it had gained the previous day before closing around R18.21/$ slightly weaker than it had started the week.
A lot of action - and very little in it all at the end of the day.
Volatility & Risk Analysis
A choppy but less volatility this past week:
We would love to know: How are you managing these risks and exposures?
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The Week Ahead
It seems that 2025 has been put on 2X speed setting with the pace of events, and we do not expect a let-up anytime soon, but hopefully we will be getting closer to some resolution to the conflicts north of us..
As we can see from last week, while local events do have a say, it will continue to be geopolitical events playing out overseas that will provide triggers for moves in the coming days and week...
...but again - 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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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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