USD/ZAR off 11-week low ahead of SA budget presentation

Key moments

• USD/ZAR gains, extending pullback from 11-week low
• South Africa national budget presentation in focus
• US foreign policy developments, macro data eyed

The USD/ZAR currency pair extended a rebound from Friday’s 11-week low on Monday, as investors were closely watching for any developments regarding US foreign policy and ahead of the highly anticipated national budget presentation by South African Finance Minister Enoch Godongwana.

In February, the budget was postponed last-minute due to disagreements within South Africa’s coalition government over raising the value added tax by 2%.

“The second version of the budget is expected to include a smaller VAT hike… and spending cuts to balance the books,” Andre Cilliers, currency strategist at TreasuryONE, was quoted as saying by Reuters.

US foreign policy developments will also be in focus, after US President Trump said on Friday that the US would halt all federal funding to South Africa. US aid to South Africa amounted to $323.4 million last year.

Meanwhile, on the data front, market players will be expecting the US job openings, CPI inflation and producer price inflation figures due on Tuesday, Wednesday and Thursday respectively.

Annual headline consumer inflation in the US probably eased to 2.9% in February, according to market consensus, from 3% in January – the highest rate since June 2024.

Annual core CPI inflation probably eased to 3.2% in February from 3.3% in January.

The USD/ZAR currency pair was last up 0.27% on the day to trade at 18.2480. The exotic Forex pair has bounced off last Friday’s low of 18.0464 – its lowest level since December 18th 2024.