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USD/ZAR Forecast: February 2023


The USD/ZAR appears ready to start the month of February near bullish highs as the South African electrical supply crisis heightens.

As of this morning, the USD/ZAR is near the 17.40750 ratio, which means it is trading near it’s one-month high achieved on the 6th of January. On the 12th of January, the USD/ZAR challenged a low around the 16.67800 ratios showing a rather considerable amount of bearish optimism. As the middle of January approached the USD/ZAR was correlating rather well with global Forex as many financial institutions traded with a weaker USD mindset.


After touching highs above the 18.55000 level in October and early November of 2022, the USD/ZAR then reversed lower and looked as if it might be on the road to a stronger South African Rand as selling forcefully developed.  On the 30th of November for perspective’s sake, the USD/ZAR was trading near the 16.88000 mark. The low at the end of November could be interpreted as the USD/ZAR being oversold, but it can also be thought of as a warning sign for the currency pair for things to come.

After hitting this low on the 30th of November the USD/ZAR reversed higher violently. On the 1st of December, yes the very next day, the USD/ZAR soared to the 17.93000 mark briefly. Why? The month of December produced choppy trading with sharp reversals being displayed regularly as equilibrium was sought in the USD/ZAR. And traders should remember this was happening as many major currencies were still maintaining a bearish stance versus the USD, because U.S Federal Reserve’s monetary policy outlook was being interpreted as potentially less aggressive.

USD/ZAR Steps away from Major Currency Correlations

Simply put the USD/ZAR is trading in a bullish stance largely because of the growing electrical crisis in South Africa. The state-owned electrical utility company Eskom has fallen into complete disarray, hit by a lengthy list of mismanagement and corruption accusations. Electrical outages known as load shedding are increasing; the length of the rolling blackouts is getting worse. The ruling ANC government of South Africa has been forced to admit there is a crisis. And in a new development in the past couple of days, the ANC is starting to echo calls for a national emergency to be declared regarding the electrical supply crisis, which has been long sought by others and up to now how largely fallen on deaf government leadership ears.

  • After trading near lows on the 12th of January, which touched depths in the USD/ZAR not seen since late August, the USD/ZAR has traversed upwards in a choppy manner.
  • The USD/ZAR is hovering near a monthly high as February gets ready to start, and financial houses are focused on problems within South Africa that affect economic production caused by a lack of reliable electricity supply.

USD/ZAR Outlook for February 2023:

The speculative price range for USD/ZAR is 16.91000 to 18.10000

Having proved it can correlate to the global Forex market with strong bearish momentum, the USD/ZAR has stepped away from this mindset as domestic worries hurt the South African Rand.  Speculators can certainly sell the USD/ZAR and look for reversals lower, but they should be careful. South Africa looks ready to enter a potentially disturbing period of political unease as loud voices gather regarding the load shedding problems. Calm leadership will have to lead the nation out of the current crisis. Can that happen? Financial houses like clarity and the lack of clarity within South Africa make trading the USD/ZAR difficult.

Traders should be braced for the potential of more volatility in the USD/ZAR. If a viable solution were embraced regarding the load-shedding problem in South Africa this could help the USD/ZAR significantly, particularly if the U.S Federal Reserve maintains a less aggressive monetary policy stance regarding future interest rate hikes. The USD/ZAR could see a selloff and a resumption of a correlated global Forex stance if there is clarity and resolution regarding load shedding.

However, if conditions stay the same or get worse, the USD/ZAR is likely to continue to face bullish sentiment. The current higher values of the USD/ZAR may look overbought, but the currency pair has traded higher and it should be remembered the 18.0000 level was touched and sustained from the last week of September until the first week of November 2022. Traders should use cautious leverage while wagering on the USD/ZAR and be ready for fast conditions which will be affected by South African domestic concerns.



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