What is the exchange rate?
The exchange rate is the price of one currency in relation to another.
Exchange rates can be fixed or variable. The fixed exchange rate is determined by the central bank, while the floating/variable exchange rate is determined by market supply and demand.
About USD and ZAR currencies
- US Dollar (USD)
The Central Bank is the Federal Reserve System (also known as the Federal Reserve System or the Fed). The US dollar is the de facto world currency. Most commodities (including gold and oil) are priced in US dollars. The United States is the largest economy in the world.
The developing countries of the United States are facing challenges and will continue to run huge trade deficits with other countries.
- South African Rand (ZAR)
The Central Bank is The South African Reserve Bank. “Rand” refers to the Witwatersrand, Johannesburg’s mountain park, where most of the country’s gold ridges are located.
South Africa is a middle-income market rich in natural resources and well-developed infrastructure. South Africa is the world’s largest producer of platinum, gold and chromium. Besides these and other metals, it also produces tools and diamonds.
Due to its relatively high interest rates, ZAR is a popular transport currency.
USD and ZAR in forex trading
USD / ZAR is called an appealing currency pair or currency trading because the rand (ZAR) is an emerging market currency with less liquidity than developed market currencies. However, lower liquidity leads to higher volatility, which in turn leads to the ability to achieve higher gains (or losses).
In addition, South Africa’s economy is more advanced than some of its emerging market economies, and in turn is considered to have higher liquidity than many of its peers, more than sufficient for commercial purposes.
What affects USD vs ZAR exchange rates?
- Economic news
When trading the South African USD/Rand, traders will see important economic information from the US and South Africa. This is because this pair reflects the economies of the two countries. Some key data to consider in this regard are GDP (GDP), consumer price index growth, the trade balance/current account and unemployment.
- Monetary Policy
Currencies are more sensitive to central bank monetary policy. It is expected that the rise in interest rates in the economy will have a positive effect on the national currency, while the decrease in interest rates will have a bearish effect. The higher the interest rates the higher the exchange rates as the demand for a country’s assets increases.
What is the current USD vs ZAR exchange rate?
The current USD vs ZAR exchange rate is as follows:
Dollar to South African Rand Exchange Rate Today, Live 1 USD to ZAR = 15.0567. The exchange rate between these two currencies fluctuates a lot and is currently high due to US high interest rates.