USD/ZAR: Rand correction continues – ING
South African Rand Faces Pressure as Investors Exit Carry Trades
Chris Turner from ING notes that investors are moving away from previously favored long positions in the South African Rand. This shift is occurring as the country's low inflation outlook weakens, market volatility increases, and the rally in precious metals slows down.
Earlier, towards the end of last year and into the start of 2026, the Rand attracted significant interest. The appeal stemmed from subdued inflation, a central bank adopting a lower inflation target, and strong inflows into local currency bonds. Additionally, the Rand benefited from rising prices in precious metals such as gold and platinum.
However, by March, the supportive environment for low inflation had started to deteriorate. Increased market volatility has prompted investors to reduce their carry trade exposure, and precious metals are no longer gaining from inflation-driven demand.
Turner highlights that the USD/ZAR exchange rate could soon test the 17.00 to 17.25 range, with the possibility of reaching 17.75 in the coming week if energy costs climb further and global equity markets experience additional declines.
(This report was produced with assistance from artificial intelligence and subsequently reviewed by an editor.)
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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