Welcome to our latest Weekly Rand Review. Not a week to have remained long on the Rand, as the tide changed - and swiftly!
Everything was looking lekker rosy until Thursday afternoon, but then Governor Kganyago decided to gate-crash the party with a rate hike that nobody saw coming.
Let’s give you some of the lowdown.
Market Pulse
The week started with classic Rand strength momentum, but Thursday’s SARB shock turned celebration into capitulation. Sometimes central bankers just love to surprise markets—and not in a good way.
- Price Action: R17.78–R18.02 range; avg daily move 38 cents
- Technical Setup: R17.80 support obliterated; R18.00 resistance now key
- Momentum: Friday close weak as position unwinding accelerated
- Risk Events: SARB hike was the game-changer; global data secondary
- Correlated Moves: BTC flat, Gold steady, DXY mixed, EUR/ZAR higher
The Rand opened at R17.81/$ with bulls firmly in control, immediately testing the R17.78 level as month-end pension fund flows provided steady support.
Asian session strength carried through to European hours with offshore accounts covering short positions ahead of what everyone assumed would be a dovish SARB meeting. Local bond yields drifted lower in anticipation of rate cuts, while mining stocks rallied on Rand strength expectations.
We closed Monday at R17.83, looking every inch like the currency ready to break lower.
Tuesday brought more of the same bullish momentum, with USD/ZAR opening at R17.83 and grinding steadily lower as global risk appetite improved.
The morning saw consistent buying interest around any move back toward R17.85 while corporate hedgers stayed largely absent, waiting for better levels.
Economists were expecting a close call, with a significant chunk thinking the traditionally cautious MPC might hold rates, as the Rand closed Tuesday at R17.93/$ yes, weaker, but still within the Rand bullish trend.
Hump day delivered mixed signals that should have been a warning. Early strength took us from R17.93 back toward R17.89, but the momentum felt different more mechanical than conviction-driven.
Whispers emerged about potential SARB caution despite mostly dovish consensus, which kept the market in balance as it closed at R17.89/$/
And in other news
US Trade Policy Uncertainty: Ongoing legal challenges to the Trump administration’s tariff program created an unstable backdrop for emerging markets. While the temporary court block provided relief, the underlying agenda to rebalance the tariff scales continues to keep EM currencies on edge and central banks globally more hawkish than expected. As we have said before, global trade as we have known it for the past few decades is being changed completely.
Commodity Price Volatility: Continued weakness in key South African export commodities, particularly platinum and gold, reduced the traditional buffer against rand weakness. With commodity prices offering little support, the currency became more sensitive to domestic monetary policy shifts.
Getting back to the Rand
SARB day delivered some dovish euphoria, with Rand bulls in full control, pushing the market down below R17.80 in anticipation of the rate decision.
At exactly 3 pm, the MPC’s somewhat unexpected surprise 25bp cut to 7.00% sent the Rand immediately stronger to hit its best level for months at R17.74,and by the close, we were sitting pretty at R17.78, having held most of the post-SARB gains throughout the session. Local bonds rallied, mining stocks surged, and carry traders piled back in as the dovish surprise validated the week’s bullish positioning.
For once, SARB delivered, and markets actually kept the gains. Thursday belonged to the Rand bulls.
But then, Friday dawned, and Thursday’s initial euphoria completely evaporated.
The Rand opened Friday at R17.84 but immediately came under pressure as global risk sentiment soured and monthend position squaring accelerated. Corporate treasurers who missed Thursday’s brief strength window rushed to hedge at deteriorating levels pushing the Rand relentlessly toward the R17.95+ area.
As a result, we closed May at a disappointing R17.98, giving back all the week’s gains and then some.
Sometimes the market gives you everything you want—then takes it away twice as fast.
The week served as a harsh reminder that central bank surprises can be triggers that instantly reverse currency trends.
Volatility & Risk Analysis
Avg Daily Range: 20 cents (1.1%) – R200,000 per $1m USD position
Weekly Range: 32 cents (1.8%) – R320,000 per $1m USD position
Friday’s volatility explosion created the week’s damage, with most participants caught wrong-footed by the post-SARB unwind.
Just when the dovish surprise looked like a gift markets found a way to turn victory into defeat. Respect the market
Time to remember:
The Week Ahead
There are a number of potential market movers this week. And, of course, all eyes will be on Istanbul where Ukraine-Russia peace talks are scheduled to resume—though Ukraine’s weekend targeting of Russia’s strategic bomber fleet has cast serious doubt over negotiations.
The geopolitical noise could easily overshadow domestic fundamentals and keep emerging market currencies on edge.
Until next week—never underestimate a central banker’s capacity to shock.