June was marked by a sharp escalation in geopolitical tensions and rising economic uncertainty, yet global markets showed notable resilience. The conflict between Israel and Iran reached a critical point with the launch of Operation Midnight Hammer, during which the United States conducted major airstrikes on Iran’s nuclear infrastructure. In retaliation, Iran threatened to close the Strait of Hormuz, a vital global oil transit route. This raised fears of supply disruptions and triggered a spike in oil prices, further intensifying concerns around energy security.

The heightened tensions prompted a flight to safety, with investors shifting capital into traditional safe-haven assets such as gold and the US dollar. Despite this, the dollar’s longer-term outlook remains clouded by domestic policy concerns.

On the trade front, the United States reignited global trade tensions by doubling tariffs on steel and aluminium to 50%, and introducing new reciprocal tariffs ranging from 10% to 70% on countries without formal trade agreements. Although a trade deal with China was announced on June 27, its vague terms have done little to reassure investors. The resulting policy uncertainty has disrupted global supply chains, increased market volatility, and placed pressure on corporate earnings.

Meanwhile, central banks in developed markets continued to diverge in their monetary policy responses. The European Central Bank cut rates by 0.25% to 2.00%—its eighth cut since June 2024—in response to slowing inflation. In contrast, the US Federal Reserve held its base rate steady at 4.5% for the fourth consecutive meeting, citing a strong labor market but elevated economic uncertainty. The Bank of England also opted to hold rates steady amid ongoing volatility. This divergence in policy is fueling fluctuations in both foreign exchange and equity markets.

Amid these developments, the World Bank released a cautious outlook in its latest Global Economic Prospects report. It forecasts global growth to slow to 2.3% in 2025, nearly half a percentage point below earlier projections. While a global recession is not expected, the first seven years of the 2020s are on track to deliver the slowest average growth since the 1960s. Inflation is projected to remain elevated at 2.9%, driven by tight labor markets and rising tariffs.

Despite these headwinds, markets posted strong gains in June. Oil prices surged on supply concerns, while emerging markets outperformed, buoyed by a weaker dollar and relative resilience to tariff impacts.

As geopolitical risks and economic uncertainty continue to shape the global landscape, investors are advised to remain vigilant. The coming months will be critical in assessing the durability of market momentum and the effectiveness of policy responses in navigating an increasingly complex global environment.

Rand / US Dollar:

• In June, the Rand gained 1.5% against the USD, from a gain 3.1 in May, from April – 1.1%, 0.9% in March and 0.6% in February.
• This compares with the long-term monthly average
  • appreciation of 3.9%
  • depreciation of -4.2%

Rand / Euro:

• In June, the Rand lost 2.6% against the EUR, from a gain of 4.0 in May, from April – 5.8% -3.5 % in March, and 0.9% in February.
• This compares with the long-term monthly average
  • appreciation of 2.8%
  • depreciation of -3.2%

Rand / British Pound:

• In June, the Rand was flat against the GBP, from a gain of 3.6% in May, -4.5% in April, -1.5% in March, and 0.8% in February.
• This compares with the long-term monthly average
  • appreciation of 3.1%
  • depreciation of -3.1%