UBS sees potential for USD/ZAR to further weaken as trade deal optimism boosts risk appetite

Published 07/05/2025, 13:52
© Reuters.

Investing.com -- The South African rand is on the rise, fueled by expectations of trade agreements being forged between the United States and its trade partners.

The positive shift in market dynamics has the potential to propel the rand even further in the short term. Despite this recent boost, UBS maintains a cautious stance on the rand’s future.

The analysts at UBS point to a dimmer global growth outlook and internal political tensions within South Africa’s ruling coalition as factors that could negatively impact the rand in the upcoming quarters.

Given these concerns, UBS suggests selling the downside in the USD/ZAR currency pair for the time being. This strategy aligns with the expectation that the rand may face challenges ahead, despite the current favorable conditions contributing to its rise against the US dollar.

The USD/ZAR pair reflects the exchange rate between the US dollar and the South African rand, and movements in this pair are closely monitored by traders and analysts as indicators of relative economic strength and market sentiment.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers
© 2007-2025 - Fusion Media Limited. All Rights Reserved.