Rand Under Pressure as US-Iran Standoff Fuels Oil Price Surge
September 28, 2026
Good morning
It’s the last day of September, historically the worst month of the year for risk assets, but with the S&P500 just -0.2% down for the month thus far, and with US futures slightly in the green, there’s a chance that the benchmark index could eke out a small monthly gain. Not so for the Rand however as we started the month at R16.10 to the Dollar and we go into today at R16.38.
These are the mid rates at 6:00 today:
| USD = R16.40 | AUD = R11.43 |
| GBP = R21.70 | DXY = 101.41 |
| EUR = R18.59 | Brent Crude = $96.53 per barrel |
Market News
- It would take something dramatic for the Rand to close below R16.10 to the Dollar today, so it’s best that we manage our expectations and rather hope that we can stay below R16.50, as we weakened to R16.47 yesterday before headlines out of the US allowed us to turn things around and move back into the R16.30’s. But the first of the week’s main events comes this afternoon; let’s see if our trading range below R16.50 remains intact.
- Yesterday was a relatively strange day in the currency market as the Rand came under pressure for two reasons, but then we made an about-turn thanks to unexpected developments. Our weakness came from a weakening Euro as well as elevated oil prices, with the Euro doing most of the damage thanks to concerns around Europe’s growth prospects given their reliance on imported energy, as well as political concerns from France and Germany. With the Euro falling to its lowest level against the greenback since May 2025, that allowed the Dollar Index to climb to 101.59, its highest level since June this year, and the Rand fell to R16.47 as a result.
- Euro weakness was a problem for the Rand, but coupled with this came increasing expectations of a FED interest rate hike at their October meeting; this, as rising oil prices over September translated into higher inflation expectations, which in turn saw bets of a hike climb from 57% a week ago to 70% yesterday morning. But then we heard that influential FED member John Williams said he sees “no need for urgency” when raising rates to combat inflation, comments that poured cold water on expectations for an October hike, and with bets falling back to 50% in an instant that saw the Dollar Index pull back while the Rand recovered to R16.39.
- Adding to our relative good fortune is a noticeable fall in oil prices. Brent Crude has dropped to $96/barrel, well below the $108/barrel level it hit just a few days ago, and while Donald Trump has rejected Iran’s plan to re-open the Strait of Hormuz, the fact that both sides are engaging with mediators is a positive sign. This, plus confirmation that oil volumes leaving the Gulf area have increased to 16.4 million barrels per day, the highest since the war began, suddenly things aren’t as gloomy as they were, which hopefully translates into more Rand strength.
- Middle East headlines will remain important, but today the market has all eyes on the US personal consumption expenditure report at 2:30 pm our time. PCE is the FED’s preferred inflation gauge, and with speculation around an October rate hike being driven primarily by inflationary concerns, today’s report has the potential to either “confirm” another hike, or call the meeting into question. Obviously, the Rand is hoping for the latter, where a cooler-than-expected number would definitely dent the Dollar; all will be revealed later today.
- Local market data today sees our private sector credit extensions at 8:00, producer inflation at 11:30, and our balance of trade at 2 pm.
- Possible USD mid-rate trading ranges in the Rand today are R16.20 and R16.50.
GLOBAL INVESTMENT OFFERING!!!
Foundation Fund Managers gives you the opportunity to invest in international shares which gives you direct access to owning the likes of Google, Caterpillar, Amazon, Apple, Nvidia, Home Depot, Walmart, VISA, Microsoft or any other company listed on the London Stock Exchange, NASDAQ or NYSE.
We also offer local share portfolios with a bespoke selection of stocks listed on the JSE.
For more information, please contact Hadyn Little on:
084 910 8078 or [email protected]
