The rand is showing uncharacteristic resilience amid global market anxiety, defying its history of volatility and holding steady against the US dollar.<\/p>\n\n\n\n
After trading just under R16\/$ last week, the rand pulled back to around R16.15\/$ on Monday (31 August) following the Jackson Hole symposium in the United States.<\/p>\n\n\n\n
The symposium is where the US Federal Reserve Chair gives a speech, signalling to markets the reserve’s economic policy outlook for the year ahead.<\/p>\n\n\n\n
New US Fed chair, Kevin Warsh, delivered a speech which markets have taken as hawkish, breaking the recent sentiment that was slowly erasing interest rate hikes in the US this year.<\/p>\n\n\n\n
According to Investec Chief Economist Annabel Bishop, markets are now factoring in a greater, though not yet fully implied, chance of a US interest rate hike in September following the speech.<\/p>\n\n\n\n
She noted that there is now a 61% probability of a 25 bp hike, up from 43% before the speech, strengthening expectations for a hike across the spectrum.<\/p>\n\n\n\n
With a rate hike anticipated in the US, typically the rand would take a hit against the dollar; however, Bishop noted that the reaction “has not been substantial”.<\/p>\n\n\n\n
“The rand reached R16.19\/$ on Friday from below R16.00\/$, then pulled back to R16.12\/$ this morning, and is likely to see further retracement towards R16.00\/$ again,” she said.<\/p>\n\n\n\n
She added that the rand has also not weakened notably against the pound or the euro; instead, it has mainly moved against the US dollar.<\/p>\n\n\n\n
This is notable because the rand’s recent movements have been small by historical standards, especially relative to prior volatility.<\/strong><\/p>\n\n\n\n The rand is also likely to see further strength, Bishop added.<\/p>\n\n\n\n The wider trend for the rand this year has been one of resilience and stability, which is completely uncharacteristic.<\/p>\n\n\n\n The unit saw substantially less volatility this year, despite the oil price shock, the war in the Middle East, and changes at the US Federal Reserve Bank.<\/p>\n\n\n\n In the past, these events would have led to wide fluctuations of several rands<\/strong>, Bishop said.<\/p>\n\n\n\n Notably, the rand remains firm even as the Middle East War has escalated again over the past few days, with Iran and the US striking each other\u2019s assets. <\/p>\n\n\n\n The oil price saw a modest reaction, still just above $90 a barrel, with the Strait of Hormuz remaining a flashpoint, Bishop noted.<\/p>\n\n\n\n However, the rand has even shrugged this off, instead focusing almost entirely on the Jackson Hole speech. <\/p>\n\n\n\n “The message conveyed was not one of an urgent need for interest rate hikes either in the US, and instead, Chair Warsh was at pains not to give any forward guidance to the markets on rate moves,” Bishop said.<\/p>\n\n\n\n “His speech was also not particularly hawkish taken in total, despite strong reference to the need for low inflation, and as such, there is not likely to be a prolonged market reaction to the speech,” she added.<\/p>\n\n\n\n According to Investec’s scenario modelling, the base case remains for the rand to maintain its strength, averaging R15.90 in the final quarter of 2026.<\/p>\n\n\n\n It is expected to strengthen further heading into the new year, but settle in a R15.75-R16.00\/$ range.<\/p>\n","protected":false},"excerpt":{"rendered":" The rand continues to surprise markets by holding firm in situations that would have caused it spiral in the past.<\/p>\n","protected":false},"author":10,"featured_media":851128,"comment_status":"open","ping_status":"closed","sticky":true,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"posted","_sma_x_autopost_error":"","_sma_x_post_id":"2094422718988849429","_sma_facebook_post_id":"191437357620492_2191948434958889","_sma_instagram_post_id":"18025114619884222","_sma_x_attempts":1,"footnotes":""},"categories":[11121],"tags":[19853,1498,3670],"class_list":["post-872882","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-annabel-bishop","tag-investec","tag-rand"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/872882","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=872882"}],"version-history":[{"count":2,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/872882\/revisions"}],"predecessor-version":[{"id":872907,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/872882\/revisions\/872907"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/851128"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=872882"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=872882"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=872882"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}