The South African rand strengthened on Wednesday, bolstered by a weaker U.S. dollar amid global market jitters over American tariff policy, while local attention remained focused on the country’s coalition government and key economic data releases.
By 0757 GMT, the rand was trading at 18.9425 per U.S. dollar, showing a 0.4% gain from its previous close. Meanwhile, the dollar slipped roughly 0.7% against a basket of major currencies, weighed down by uncertainty surrounding trade tensions.
The recent volatility in the dollar has been linked to heightened concerns over U.S. President Donald Trump’s tariff measures, which have intensified the trade standoff with China—South Africa’s top trading partner. The ongoing uncertainty has put pressure on the greenback in recent weeks.
“There has been little change on the tariff front overnight, but the trade war between the US and China continues to escalate,” said Andre Cilliers, currency strategist at TreasuryONE.
Back home, investors are turning their attention to upcoming data and political developments. The release of South Africa’s business confidence index for March is due at 0930 GMT, followed by retail sales figures for February at 1100 GMT. These are expected to offer insight into the health of the local economy.
At the same time, tensions continue within the Government of National Unity (GNU), as the two largest parties remain divided over a proposed increase in value-added tax set for implementation on May 1.
“The ZAR’s near-term recovery has largely played out, but it could extend to any more positive news from the GNU regarding a budget most parties can support,” ETM Analytics noted in a research report.
On the equities front, the JSE’s blue-chip Top-40 index was flat in early trade. Meanwhile, South Africa’s benchmark 2030 government bond firmed slightly, with the yield easing by 1 basis point to 9.21%.
