The Rand/USD went all the way to test major resistance at 7.20. The longer term trend is still one of a strengthening Rand, so we can expect the pair to target 6.50 over the next few months. This scenario is the dominant one for as long as 7.20 remains intact as resistance.
The weakening of the rand is ascribed to the accumulation of reserves by the SA Reserve bank, as well as foreign investors taking profit and balancing their portfolios. The fact that real interest rates in America will stay negative while in South Africa it will be positive should support rand strength for years to come. It simply means that money in SA will continue to be more expensive than money in America, meaning you could get more dollars for your rand .
