- The USD/ZAR forex pair has struggled to break above 19.20 since mid-February
- US Supreme Court ruling against "Liberation Day" tariffs has taken away some of the dollar's safe haven appeal
- Rising gold prices and investment-friendly policies in South Africa have strengthened the rand
The South African Rand has always been a currency of high drama, and the latter half of February has been no exception. The USD/ZAR pair saw a strong rally from February 12 to February 19, but the momentum suddenly stalled. This week has seen the pair gave back nearly all of the gains in a matter of days.
USD/ZAR went to lows close to 15.80 in early February before rising. Due to a correction in the price of gold that weighed on the rand and short-term USD firmness associated with hawkish Fed signals, the pair rose above 16.00 by the middle of the month, hitting intraday highs of 16.22–16.43.
What Broke the Momentum?
The reversal since February 19 has been driven by a sequence of events that, when taken together, have firmly shifted the balance back in the rand’s favour.
First, on February 20, the Supreme Court ruled 6-3 to overturn President Trump’s expansive IEEPA tariffs. The decision lowered the DXY by invalidating the 25% duties on Canada, China, and Mexico as well as the “Liberation Day” reciprocal tariffs.
As markets conjectured about the hawkish inclinations of incoming Fed Chair nominee Kevin Warsh, the DXY had recovered significantly from the end-of-January lows. The greenback was momentarily given enough fuel by that optimism and some short-covering in the dollar to push USD/ZAR back above 16.00 and eventually challenge the 16.20 zone. However, the two were unable to maintain those levels.
Then again, there’s what often gets overlooked, and that’s the fact that South Africa’s underlying strength is actually getting better, and that’s now reflected more clearly in market moves. Also, gold’s sharp price climb has lifted the rand right up with it.
Meanwhile, behind the scenes, steady changes in policy structure keep unfolding. Months of steady leadership under the unity government helped too. Confidence among investors has quietly built up, especially leading to this week’s budget release.
The Budget Catalyst
When Finance Minister Enoch Godongwana stood up to speak on February 25, the numbers began shifting. CNBC Africa reported that right after his words hit the wires, the rand edged toward 15.855 per dollar, signifying a quiet vote of confidence among investors.
For weeks, traders have watched 19.20 like a line in the sand. Each attempt by the dollar to rise past that point fizzled fast. The discussion above is important context for why USD/ZAR has been unable to reclaim 16.20. The dollar’s broader weakness isn’t the only issue facing the pair. It is up against a rand that has a solid domestic narrative to rely on for the first time in many years.
USD/ZAR Forecast
The Relative Strength Index (RSI) is now at 41, suggesting a bearish bias in the short term. On the daily chart, USD/ZAR pivots at the psychological 16.00, which aligns with the Volume Weighted Moving Average (VWMA). Its key support is at 15.80, followed by 15.64, which marked the late-January low. The first resistance is at 16.10, while the second barrier will likely be at 16.20.
USD/ZAR on the daily chart on February 26,2026 with key levels of resistance and support. Created on TradingView
The rally in mid-February was mostly driven by the dollar, which bounced back from its January lows, and short-term speculation about the hawkish leanings of incoming Fed Chair Kevin Warsh. It didn’t have much fundamental support, especially because the ZAR was weak.
This level represents significant psychological and technical resistance. Additionally, South African institutional exporters often sell dollars at these peaks to take advantage of the favorable exchange rate, creating a natural ceiling for the greenback’s value.
Very significant. Gold prices are close to record highs, which helps South Africa’s exports and the current account, which directly supports the rand. A big drop in gold would take away one of the main things that support the ZAR.