Finding one's way through the rand's recent rally has become a key focus for JP Morgan, which maintains a bullish stance on the South African currency even as the central bank pumps the brakes. The ZAR is trading stronger across major crosses as of November 2025, with USD/ZAR at 17.3204, down 0.61%. GBP/ZAR and EUR/ZAR also declined. Yet the South African Reserve Bank isn't exactly cheering.
JP Morgan holds firm on rand despite central bank hesitation as ZAR strengthens across major currency pairs in November 2025.
SARB's recent comments aim to temper near-term rand strength. Not because they hate gains, but because they want to build reserves on the cheap. JP Morgan sees this as tactical posturing, not some interventionist crusade. The central bank may cap major appreciation by buying dollars opportunistically, but it won't aggressively reverse the trend. That's the read, anyway.
The bank still likes USD/ZAR shorts, using 17.50 as the threshold to add positions. That level remains major resistance. Trading Economics forecasts USD/ZAR at 17.16 by quarter-end and 16.64 in twelve months. Normal trading range over six months? Something like 14.20 to 15.50, though spikes will happen because this is emerging markets and volatility is the price of admission.
Fundamentals look decent. South Africa got booted from the FATF grey list, which helps credibility. AGOA trade optimism supports exports. Foreign exchange reserves hit a record $70.42 billion in August. GDP growth reached a two-year high, inflation sits at 3.3%, and consumer spending looks robust. Gold and commodity prices stabilized after a rough patch, restoring some confidence. The central bank is targeting to pull inflation expectations toward 3%, signaling an implicit aim near the lower bound of its 3%–6% range. SARB's fair value models may not yet reflect recent precious metals gains, which could explain the cautious messaging despite firm ZAR performance.
The SARB delayed its first rate cut from November to March, which keeps carry trade appeal alive. That's probably good for the rand. Global monetary easing and trade tensions remain the primary external drivers, overshadowing domestic headwinds like Eskom chaos and fiscal pressures. The rand's annualised standard deviation runs higher during weakness than during appreciation, according to historical daily moves since 2014. The monetary policy decisions made by SARB continue to shape rand dynamics through their direct impact on interest rate differentials and capital flows.
Moody's sovereign rating decision in November could trigger volatility, though any downgrade might already be priced in. JP Morgan views upcoming swings as opportunities for better entry points. The bank's message is clear: SARB caution is noise. The bullish call stands.
