- The USD/ZAR as of this weekend is valued near 18.65130, and this value occurred after a spike upwards late on Friday when the currency pair had been trading near 18.41000 with relative calm.
- The aftermath of the meeting between Ukraine’s President Zelensky and President Trump caused upheaval in some currency pairs and the USD/ZAR was one of them that was impacted.
- After reaching above 19.00000 early on February because of tariff rhetoric from President Trump which was centered on Mexico and Canada primarily, the USD/ZAR soared higher via reactions to those worries.
- Friday’s upwards momentum is part of the same feature regarding behavioral sentiment. The reason for this is because the South African Rand is not immune to global political intrigue.
The ability of the USD/ZAR to return to lower levels much of February and trace near the 18.50000 to 18.40000 levels was a good sign for the South African Rand. The results showed that financial institutions were calm. Even though there have been some political winds starting to get more turbulent in South Africa, the USD/ZAR correlated well to global Forex and the feeling the USD have been overbought in many spheres.
However, Friday’s trading and momentum higher finished near values last seen in a sustained manner from the first week of February. A potential problem for the USD/ZAR is that political influences from afar and domestically are not about to vanish. And this means day traders in March may see some of the same type of results in the coming days and weeks. Talk about tariffs will be heard again early this week from the U.S White House and political bantering in South Africa is starting to get uneasy once again. Financial institutions have a lot to think about and it may lead to some troubling outlooks.
Traders are advised to closely monitor the opening of global Forex tomorrow as they prepare to trade the USD/ZAR. Certainly the Mexican Peso should be watched, but also the USD/SGD should get a glance to see how global Forex players are reacting to what took place in the U.S White House on Friday as correlations.
- Reactions may vary, but it would not be surprising to see some risk adverse shadows linger and cause the USD to remain rather solid to bullish early this week.
- The question for USD/ZAR traders is if early nervousness will start to erode?
- And the answer is likely yes in the near-term, talk about the need for more negotiations and talk between interested parties are likely to be heard by diplomats and nations that have legitimate concerns.
- Perhaps the USD/ZAR will find resistance levels near current values or slightly higher and then start to once again flirt lower with the 18.60000 to 18.50000 ratios.
While traders and financial institutions are looking at the U.S White House, they should also pay attention to political rhetoric coming from South Africa which appears to be growing more robust. Political differences are starting to be heard once again. While the coalition government is still working financial institutions may remain relatively calm, but tranquility may not prevail over the mid-term particularly if global influences begin to merge with South African issues – meaning the Trump administration could start to turn its eyes towards South Africa.
The USD/ZAR has remained rather calm and had a rather tranquil duration since late spring last year. Financial institutions would like to see the USD/ZAR remain placid and practice a known equilibrium without violent spikes. The month of March may remain within this spectrum of relative quiet, but financial institutions will remain alert to dangers.
The range seen in the USD/ZAR in February may correlate to the results seen in the coming weeks of March. A range between 18.40000 with perhaps stronger support around the 18.30000 could play out if things become somewhat optimistic. Upwards resistance near 18.70000 to 18.80000 would show concerns are strong. Results above this level would mean noise is causing poor outlooks mid-term.
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