USD/ZAR is aiming for the 19 mark which was last breached in 2020 when the pandemic started. Economists at Commerzbank expect the pair to extend its rally towards 20.

Grey times for the rand? 

“In the current market environment with USD strength there is a risk of further losses in particular as there are risk factors on the domestic front too.”

“Economic data provide little support for the rand. Following better-than-expected August data on production in the manufacturing sector, there was rather disappointing data from the mining sector. Due to the threat of a global recession the growth outlook remains weak.”

“The hawkish South African central bank (SARB) only seems to be able to slow the rand’s nose-dive. Central bank governor Lesetja Kganyago's efforts to convince potential ZAR investors of the attractiveness of South Africa as an investment location are threatened to be counteracted by the government’s lack of reform progress in important areas.”

“We expect USD/ZAR to continue trending towards 20 for now.”