The USD/ZAR currency pair traded in proximity to a fresh 1 1/2-week high of 17.8761 on Monday, supported by easing trade tensions following the announcement of a US-EU tariff deal.

The US and the EU reached a framework trade agreement over the weekend, which resulted in a 15% import tariff on the majority of EU goods. The agreement averted a larger trade war between the two major players in global trade.

Meanwhile, market players awaited the outcome of the Federal Reserve’s two-day policy meeting.

The Fed is widely expected to leave its federal funds rate target range intact at 4.25%-4.50% at its July 29th-30th meeting.

US President Trump said last week he held a positive discussion with Fed Chair Powell, indicating the central bank’s chief might be inclined to reduce interest rates.

Investors will also be paying close attention to the press conference with Fed’s Powell for clues over the timing of any future interest rate cuts.

The minutes of the FOMC’s June meeting showed policy makers were divided on the timing and scale of potential interest rate cuts.

Though the majority of Fed officials expected some easing later this year, views ranged from favoring a rate cut as soon as July to favoring no cuts at all by the end of 2025.

The USD/ZAR currency pair was last up 0.63% on the day to trade at 17.8481.