Rand Exchange Rate Forecast | SA Mini-Budget 2026

Good morning

In February, Finance Minister Enoch Godongwana delivered a well-received Budget Speech which showed that SA was turning a corner.  Today he surely cuts a rather frustrated figure, as despite SARS overshooting tax collection targets by a material margin, the inflationary effects from the Middle East war mean our economy is creaking once again, and this time the fix is 100% out of our government’s control. 

These are the mid rates at 5:45 today:

USD = R16.40	AUD = R11.51
GBP = R21.94	DXY = 101.77
EUR = R18.41	Brent Crude = $110.36 per barrel

Market News

• The picture is still far from rosy on the international front but the good news is that the Dollar Index continued its recent slide yesterday, and while the moves have been marginal, it still meant that the Rand managed to touch R16.36 to the Dollar as the day’s best level which is our best performance since the 30th of September.  Today is a busy day on the local calendar, so let’s see if these headlines have any effect on our exchange rate, or will we remain at the mercy of international developments.
• The Dollar Index briefly fell to a three-week low yesterday thanks to a combination of oil making a sharp move lower as well as US Treasury yields falling.  Brent Crude dropped from $111/barrel to $106/barrel, possibly due to reports that the Iranian president met with the Pakistani army chief, who is a known mediator in the US-Iran conflict, and with the market desperate for any positive headlines on the conflict that saw oil drop and the Dollar retreat.  Brent has since returned to $110/barrel, so that isn’t great… 
• The Dollar Index measures the greenback against six major currencies, so its decline yesterday could also have been thanks to the Pound moving higher.  Economic conditions in the UK have been poor over recent months/years but yesterday saw a jobs report that came in stronger than expected, which suggests that their labour market is on the up, and that in turn opens the door for a Bank of England interest rate hike as soon as the 5^th of November.  Sterling reacted positively to this news, and a stronger Pound would have pushed the Dollar lower.
• The following is from Reuters and talks to the Pound’s strong performance yesterday:  The British ​Pound rose on Tuesday after jobs data pointed towards a bottoming in the labour market, reinforcing the case for a rate hike from the Bank of England when it meets next month. The labour market ​figures were the latest in a string of better-than-forecast economic data that ⁠could allow the BoE to raise rates at next month’s meeting. “The UK economy is ​surprising on the upside. There’s room for more hiking,” said Tommy von Brömsen, FX strategist ​at Handelsbanken. “Rate differentials are going to go in favour of the Pound going forward.”
• International developments will impact the Rand’s price action as always but today we get our latest inflation report, a retail sales report and then the Medium Term Budget Speech, so there is plenty on the local front to focus on.  CPI for September is expected to move higher, a scenario that could point to the SARB hiking rates again in the near future, but all eyes will be on Enoch Godongwana as he faces the task of emphasising SA’s green shoots of optimism against a backdrop of higher inflation and weakening economic performance.   
• Local market data today sees the CPI report at 10:00, retail sales at 13:00 and the mini-budget speech at 14:00. 
• Possible USD mid rate trading ranges in the Rand today are R16.25 and R16.55.

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