The South African rand fell 0.3% against the dollar as investors anticipated local GDP data and responded to U.S. tariff announcements. Late GDP expectations project a 0.9% growth. However, uncertainties in the national budget present risks, impacting market sentiment, including a 0.7% drop in the Top-40 index and stable government bond yields.
On March 4, South Africa’s rand depreciated as local GDP data approached, coupled with concerns over U.S. tariffs implemented by President Trump. At 0715 GMT, the rand was valued at 18.64 per U.S. dollar, marking a 0.3% decline from its prior close. Meanwhile, the dollar showed slight weakness against other global currencies.
Trump announced a 25% tariff on imports from Canada and Mexico, effective Tuesday, with additional tariffs starting April 2. Investors will be keenly observing South Africa’s GDP figures set to release at 0930 GMT, as they could provide insights into the country’s economic status, with a Reuters survey predicting a growth rate of 0.9%.
Andre Cilliers, a currency strategist at TreasuryONE, noted that a robust GDP report could bolster the rand but cautioned about lingering budgetary uncertainties within the ruling coalition that resulted in a postponed national budget last month.
On the Johannesburg Stock Exchange, the Top-40 index experienced a decline of approximately 0.7%. Additionally, South Africa’s government bond for 2030 remained stable with a yield around 9.085%.
The South African rand weakened ahead of the GDP release and amidst tariff concerns from the U.S. The uncertain domestic budget landscape poses risks, even as a positive GDP report could provide support for the rand. The market’s fluctuations reflect broader economic implications tied to both local and international factors.
Original Source: www.cnbcafrica.com
