It was a week of budget brinkmanship at home, mixed growth signals from the US, and fleeting safe‑haven flows abroad, intermingled with a few scattered public holidays.
Yet despite legal drama over VAT, a surprise US Q1 contraction, and a stronger‑than‑expected payrolls print, the Rand managed to rally to its best levels in a month
Let’s unpack the story behind the moves…
Market Pulse 📊
- Price Action: R18.75-18.34 range, with an average daily move of over 20 cents
- Technical Setup: Support R18.34, 18.00, resistance R18.50, 18.70
- Momentum: Mildly supportive of the Rand into Friday’s close as USD bid faded.
- Risk Events: Budget stand‑off, SA trade surplus, mixed US GDP and NFP
Key Moments (28 Apr - 2 May 2025):
Some of the more critical factors affecting price action this week:
- Budget stand‑off has VAT hike shelved: VAT hike shelved, forcing yet another revamped budget.
- SA posts R24.77bn trade surplus: March’s surprise four‑month high surplus lent brief support, only to be countered by fiscal uncertainty.
- Mixed US signals rattle markets: Q1 GDP contracted while US Non-Farm Payrolls beat forecasts.
With Monday being a public holiday, one would have expected a quiet start...
...but it was anything but, as the Rand opened the week around R18.66/$ and was immediately caught in the crosscurrents of fresh US trade‑tariff headlines out of Washington and a lack of local catalysts.
Risk‑off jitters saw the USD/ZAR spike past 18.75 in the early Asia session, but Rand then staged an impressive recovery, as it powered through the rest of the day to close out the day around R18.51/$.
Tuesday was all about domestic uncertainty, with Finance Minister Godongwana having to rework the budget after the VAT hike was scrapped,..
...but despite this, the Rand held it ground in a tight R18.47–18.59 band, as traders waited for clarity that never came.
And then Wednesday, and some data releases arrived...
The Rand opened around R18.54 and was immediately under pressure as it touched R18.64/$ before the news broke of R24.7bn trade surplus, prompting a sharp drop to hit R18.52 against the greenback...
...before more volatility hit as the US reported a 0.3% annualised GDP contraction, its first since early 2022.
The result: a choppy session that left USD/ZAR around R18.54/$, as traders eyed another holiday before the biggie on Friday.
And in other news...
Putin’s May 8–10 ceasefire announcement offers breather: In a surprise development, Russia signalled a three-day ceasefire in Ukraine to coincide with Victory Day. While far from a resolution, the gesture eased some global tension, fuelling emerging-market relief rallies mid-week—including support for the Rand.
US–Ukraine minerals pact signalled strategic realignment: The US government also concluded a rare-earths deal with Ukraine, granting US firms preferred access to critical minerals. The move not only reinforced America’s de-risking push but also hinted at long-term structural shifts in the geopolitical scene—as the conflict edges closer to a final resolution.
Bitcoin’s rally reignites safe-haven debate: Amid tariff-induced volatility and mixed macro data, Bitcoin’s surge back towards R100k sparked renewed chatter about its role as a modern-day safe haven. With equities wobbling and traditional risk hedges like gold only partially delivering, crypto flows spiked—contributing to a broader “risk recalibration” that may keep US dollar strength in check.
Gold eases after hitting $3500 high: The precious metal eased further after hitting record highs of $3500 the previous week, touching $3202 before recovering slightly.
Of interest, we had anticipated both these reversal in our recent forecasts, so neither has come as a surprise...
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Getting back to the Rand...
Thursday’s Workers’ Day holiday left many markets closed, but that didn't stop traders from pressing on.
...as gold slipped down to a two‑week lows on risk‑on flows, the USD/ZAR was pushed all the way up to near R18.71/$ before Rand-bulls stepped in to recover almost the ground it had lost to end the day around R18.57/$.
Friday delivered the week’s final twist.
The Rand opened near 18.54, gaining momentum through the morning to touch R18.34/$, its best level in a month...
...the main event then came in mid afternoon—as the US Non-Farm Payrolls report smashed expectations with 177 000 jobs added versus the 130 000 forecast, while the unemployment rate held at 4.2%...
...all signalling a labour market still running hot.
The immediate reaction saw the USD spike, pushing USD/ZAR back to R18.44/$, but the Rand managed to hold on to close out the week in the low R18.40s...
...its strongest weekly finish since early April.
Volatility & Risk Analysis
Much-reduced volatility, but still nothing to scoff at:
- Average Daily Range: 19.9c or 1.1% (equating to a potential profit or loss of R11,000 every day for every R1 million exposure)
- Weekly Range (total fluctuation): 41c or 2.2% (equating to a possible saving or loss of R22,000 for every R1 million exposure)
Just when it looks like we are going one way, and you start getting edgy or else complacent (depending on which side of the market you are on)...
...then suddenly, the market falls, and depending on whether you took action or didn't, you either make a windfall or lose your shirt...
It comes down to TIMING...
...which means everything in this game!
It is not just making the right decision but making it at the at the right time!
And for that, you need an understanding of how the markets work and why you need an objective view (like our charts above) to help you make the right decision at the right time!
Want to understand how the market actually works
- and how to use this to advantage?
Download your
"Unpuzzling the Rand" eBook HERE ⇨
The Week Ahead
And just like that, we are into May!
What a volatile 4 months it has been so far in 2025, and it is likely to get more interesting—and more bumpy!
With the whole US tariff negotiations in progress (apparently over 200 countries are busy negotiating deals), there is much uncertainty, but one thing is certain—the global trade status quo is being upended...
...and will likely look very different six months from now.
Which makes it a difficult time to be making strategic decisions with your forex exposures... and why having a forward-looking strategy really matters...
...an essential instrument to offset our natural emotional decision-making - especially in times like these!
Until next week, keep your wits about you!
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.
No charge. No card. All yours to try out for 14 days.
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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