USDZAR definition

USD/ZAR is the exchange rate between the US dollar and the South African rand, showing how many rand one US dollar will buy. It is an emerging-market exotic rather than a major, so expect thinner liquidity, wider spreads and larger, faster price swings than the benchmark pairs deliver.

The US dollar is the base currency and the rand the quote currency, so a quote of 18.5000 means one dollar is worth 18.5000 rand. A rising price means the dollar is strengthening against the rand, a falling price the reverse. You trade USD/ZAR as a forex CFD, taking a position on the rate rather than converting cash: go long if you expect the dollar to climb, short if you expect it to slip. Moves are measured in pips at the fourth decimal place, and your result is the pips gained or lost multiplied by your position size.

The rand takes its lead from the South African Reserve Bank, whose high policy rates make holding rand attractive and turn USD/ZAR into a popular carry trade. Gold and other commodity prices feed in too, since South Africa is a major exporter, and the pair is acutely sensitive to global risk sentiment: when investors retreat from emerging markets the rand tends to sell off hard. The result is one of the more volatile currencies you can trade.