The USD remains strong despite a slight pullback recently, driven by Trump’s policy proposals, European risks, and a resilient US economy. While overvalued, any correction may be shallow, sustaining US exceptionalism. The ZAR has weakened due to the strength of the USD but could find support from upcoming domestic policy events.

Trump’s tariff actions, including a sudden 25% tariff on Colombia, heightened trade policy uncertainty. Meanwhile, China’s DeepSeek R1 AI model disrupted markets, raising concerns about US tech competitiveness. These events underscored broader market vulnerability stemming from the ongoing global tightening of liquidity conditions.

The Fed held rates steady but expressed disinflation concerns, while the ECB cut rates by 25bps, and SARB’s third consecutive cut signalled limited further scope for easing amid global risks.