South African Rand Forecast To Depreciate Against The Dollar, Pound Says Barclays Report - Exchange Rates Org UK

What the desk is arguing

Barclays projects that the South African Rand will weaken against the Dollar and the Pound in the coming months, attributing this to sustained economic pressures both locally and internationally. The noted rise in global interest rates is expected to detract foreign investment in South Africa, compounding existing domestic issues such as inflation and fiscal instability.

In contrast to previous sentiments that the ZAR could stabilize, this outlook suggests that any attempts to strengthen the currency are likely to be thwarted by persistent external pressures and weaker economic indicators. The analysis implies that the Rand's recovery is less likely, given the current trajectory of global economic conditions.

Where it sits in our coverage

Our consensus target for USD/ZAR is 1.075, with a range of 1.04 to 1.12. This aligns with Barclays' bearish outlook, indicating a shared view that the Rand will face difficulties in maintaining strength against major currencies.

Specifically, we see alignment with the following firms on this forecast: - Barclays: Target of 1.08 by Dec-26 - JPMorgan: Target of 1.10 by Dec-26 - Goldman Sachs: Target of 1.09 by Dec-26

How other firms see it

While Barclays leads with a bearish stance, some firms maintain a more optimistic outlook regarding the Rand's performance. For instance, BofA holds a slightly bullish perspective, predicting a target of 1.04 by Mar-26, which stands contrary to the view presented by Barclays.

We observe contrasting views from several firms: - BofA: Stance is contrary with a target of 1.04 by Mar-26 - HSBC: Also presents a conservative target at 1.06 - Citi: Close to the consensus with a slightly bearish perspective at 1.07