The Middle East tension has become just another new normal.
Middle East turmoil is increasingly becoming part of the background for global markets, with renewed flare-ups still moving oil prices and the dollar but eliciting a more muted response from the rand.
The local currency has traded in a relatively narrow range of between R16 and R16.50 to the US dollar since early May, despite recurring escalations in the Middle East and renewed concerns over shipping through the Strait of Hormuz, Trading Economics has noted.
TreasuryONE currency strategist Andre Cilliers said the dollar has also strengthened as investors seek safety during periods of heightened uncertainty.
Annabel Bishop, Investec chief economist, said the US dollar index had “reached its strongest point since June 2025, as risk aversion is elevated in global financial markets, although not to the degree of the disruption of US tariffs, but is preventing the rand from strengthening currently.”
