ING’s Chris Turner explains that previously popular long South African Rand positions are being unwound as low inflation comes under pressure, volatility rises and precious metals lose momentum. He flags 17.00/17.25 as near-term risk for USD/ZAR, with a possible extension to 17.75 next week if energy prices and global equity stress intensify further.

Rand pressured as carry trades unwind

"Late last year and into early 2026, long South African rand positions had been some of the most popular. Low inflation and a central bank switching to a new, lower inflation target had encouraged inflows into its local currency bond market. And the rand's exposure to the precious metals story was a major positive as gold and platinum surged."

"Fast-forward to March, and the low inflation environment is under pressure, higher volatility is forcing de-leveraging of carry trade positions and precious metals are not deriving any further benefit from the inflation shock."

"17.00/17.25 is the near-term risk for USD/ZAR, with an outside risk of 17.75 next week if energy prices go another leg higher and global equity markets take another major leg lower."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)