What we know
A range of factors influenced markets last week, sending currencies in different directions. Both Japan and France faced their own political uncertainty, which pushed the safe-haven US Dollar higher. Yet, the US continues to struggle through its own turmoil in what is now its longest-ever government shutdown, posing a clear risk to market sentiment and to the Dollar over this period.
For the first time since August, the Dollar Index broke through the 100.00 level as expectations of further US rate cuts faded and investors sought safety amid renewed global uncertainty. In addition, gold prices fell to US$3,930/oz on Tuesday. The combination of a stronger Dollar and weaker gold price sent the USD/ZAR currency pair above the psychological level of 17.50 on Tuesday, for the first time since September.
Locally, PMI figures released on Wednesday signalled a contraction, suggesting that economic pressures persist and continue to weigh on the Rand. However, the Rand managed to recover from Thursday onwards as global risk appetite increased. The week ended on a high note for the Rand, with South African foreign reserves rising in October and, last but certainly not least, the final lift from the Springboks’ dominant performance in Paris on Saturday.
What others say
IOL – Experts warn consumers need relief ahead of South Africa’s mid-term budget statement
“As South Africa approached the Medium-Term Budget Policy Statement (MTBPS) on 12 November 2025, experts highlighted the mounting financial pressure on consumers, particularly regarding tax policies, inflationary adjustments, and household debt.“
Convera – Dollar’s rebound gains momentum
“The US dollar index (DXY) has performed well so far this month – up ~0.7% – despite the ongoing U.S. government shutdown.“
Reuters – US Senate advances bill to end federal shutdown
“The U.S. Senate on Sunday moved forward on a measure aimed at reopening the federal government and ending a now 40-day shutdown that has sidelined federal workers, delayed food aid and snarled air travel.“
What we think
Last week we said that “Looking specifically at the Rand’s performance over the past while, it really has felt like a two-steps-forward-one-step-back scenario, as a strengthening trend punctuated by short periods of weakness has kept ZAR trading feeling very comfortable.”
While optimism is in the air, concerns around the Rand remain. During the Medium-Term Budget Policy Statement on Wednesday, the debt-to-GDP ratio indicated a more cautious growth outlook than previously projected and highlighted the need for greater fiscal discipline in tax collection and expenditure. The sobering data suggests that, for now, the Rand’s potential to strengthen is likely to remain limited.
Looking ahead, it will be quite a news-heavy week. Unemployment data will be released in both the UK and South Africa on Tuesday, alongside the ZEW Economic Sentiment Index. The UK will also release GDP data on Thursday.
The key focus of the week will be South Africa’s mid-year budget review, taking place on Wednesday.
In the US, several data releases are scheduled, but they are unlikely to be published unless government agencies reopen. There is ongoing discussion around ending the shutdown, which could result in a stronger Dollar.
In the short term, the Rand is expected to hold its ground against the USD for as long as the US government remains shut down and risk-on sentiment prevails.
Our range for the week is 16.95 – 17.40.
Have a great week ahead.
