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Corporate and Investment Bank
Standard Bank Group
South Africa FX 05 August 2026

FX Monthly Chart Book

Shireen Darmalingam

  • The rand experienced a volatile July, but proved relatively resilient despite several periods of significant weakness. Over the month, it depreciated by around 0.8% against the US dollar, 1.8% against the euro and 2.5% against the pound. Trading within a wide range of R16.18/$ to R16.98/$, the currency reflected the tug-of-war between supportive domestic fundamentals and persistent global risks. The COP, KRW, BRL, CZK and RON were among the best performing EM currencies, while the TRY, HUF, TWD, RUB and CLP were among the worst performing EM currencies.
  • The rand came under pressure early and mid-month as the Iran conflict intensified, driving oil prices higher, increasing global risk aversion and boosting demand for safe-haven assets, particularly the US dollar. Concerns over potential disruptions to shipping through the Strait of Hormuz raised fears of higher global inflation and a worsening of SA's trade balance, undermining sentiment towards emerging market assets. At the same time, a firmer US dollar environment and uncertainty surrounding US trade policy and tariffs added to downside pressure on the currency.
  • Domestic developments also weighed on the rand. Markets were caught off guard when the SARB left interest rates unchanged in July, prompting investors to scale back expectations for the local interest rate path over the remainder of the year. The decision triggered a sharp sell-off in the currency, briefly pushing it close to R17.00/$. Concerns about slowing economic growth, weaker business and consumer confidence, and ongoing infrastructure and logistics constraints further dampened sentiment. However, the rand recovered part of its losses towards month-end as tensions in the Middle East eased and global risk appetite improved. Signs of progress towards de-escalation helped lower oil prices and renewed investor interest in emerging markets. South Africa also benefited from elevated gold and platinum prices, which supported export earnings and the country's terms of trade. In addition, continued fiscal consolidation, progress with structural reforms through Operation Vulindlela, and broadly constructive feedback from credit rating agencies helped underpin confidence in local assets.
  • Looking ahead, tthe rand is likely to remain highly sensitive to developments in the Middle East, oil price movements and shifts in global risk sentiment. The key downside risk remains a renewed escalation of the Iran conflict, which could boost the US dollar, raise energy prices and trigger renewed outflows from emerging markets. Ongoing uncertainty around US trade policy and tariffs may also contribute to bouts of volatility. Offsetting these risks are SA's favourable terms of trade, strong precious metal prices, continued reform progress and improving fiscal dynamics, which should help provide a degree of support to the currency.
  • We see the rand ending the year at R16.20/$, and R16.55/$ by the end of 2027.
 

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