The South African rand remains in a bull market as the country’s economic recovery gains steam. The USD/ZAR pair dropped to 15.92 on Monday, down sharply from last year’s high of 19.93, and technicals point to more downside in the near term.
South African rand rallies as the economic growth gains steam
The South African rand has gained steam in the past few months, and this trend may continue in the coming weeks or months as the economic recovery gains steam.
The economic growth has remained robust since 2024, when the country went to an election, leading to a deal between the African National Congress (ANC) and the Democratic Alliance (DA).
This deal, which also involves ten other parties, has stabilized the country, with the economic growth continuing. For example, the government of national unity is now building ports, roads, dams and working to solve the perennial power crisis that affected the economy for years.
Most importantly, the government has worked to fix the public debt, which has led to a credit rating upgrade by S&P Global, with Fitch and Moody’s expected to do so this year. It was the first credit rating upgrade in nearly 20 years and was a reflection of the ongoing reforms.
In a recent report, Standard Bank noted that the country’s economy was in the best shape in over a decade, a trend that may continue if the country continues to clear its infrastructure backlog.
The bank now expects that the economy grew by 1.2% in 2025 and is expected to grow by 1.4% this year and 2.1% by 2028. These are great metrics as they come after the South African economy experienced a decade of stagnation.
In addition to infrastructure spending, the economy is benefiting from the ongoing commodity price surge that has pushed gold prices to a record high. The agricultural sector has also continued to do well, with exports continuing their recovery this year.
The ongoing South African rand surge has also helped the country’s economy by reducing the import prices of key commodities like petroleum, gas, and apparel.
Looking forward, the next important catalyst for the USD/ZAR exchange rate will be the upcoming minutes of the last monetary policy meeting, which will come out on Wednesday this week. These minutes will provide more color on what the Federal Reserve did in the last meeting and provide hints on what to expect in the coming ones.
USD/ZAR technical analysis
USDZAR price chart | Source: TradingView
The weekly timeframe chart shows that the USD/ZAR exchange rate has slipped sharply in the past few months, moving from a high of 19.92 in April last year to the current 15.92. It is hovering near its lowest level since June 2022.
The pair has dropped below the key support level at 17.02, its lowest level in September 2024 and the neckline of the double-top pattern at 19.92.
The pair also formed a death cross pattern in July 2025 as the 50-week and 200-week Exponential Moving Averages (EMA) crossed each other. It has also moved to the 50% Fibonacci Retracement level.
The MACD indicator has moved below the zero line, while the Relative Strength Index (RSI) has moved to the oversold level of 23.
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