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South Africa’s rand strengthened in early trading on Wednesday, supported by a weaker U.S. dollar, falling oil prices and improving investor confidence, while markets awaited fresh data on the country’s private sector business activity.
By 0612 GMT, the rand was trading at 16.35 against the U.S. dollar, up about 0.2% from its previous close.
Investor sentiment improved after U.S. President Donald Trump said his administration had held “very good discussions” with Iran, raising hopes that the five-month conflict could be nearing an end. The comments weighed on the dollar and extended the decline in global oil prices, making risk-sensitive currencies such as the rand more attractive to investors.
The improved mood also lifted several emerging-market currencies across Asia, as easing geopolitical tensions boosted demand for higher-risk assets.
South Africa also benefited from stronger commodity prices, with gold rising nearly 2% and platinum gaining about 1%—a positive development for the country’s export-driven mining sector.
Market attention has now shifted to the release of the July S&P Global Purchasing Managers’ Index (PMI), due later on Wednesday, which is expected to provide a clearer picture of business conditions in South Africa’s private sector.
The data comes just days after a separate manufacturing PMI showed business confidence weakened further in July, as declining export demand and renewed concerns over tensions between the United States and Iran weighed on sentiment.
Meanwhile, South Africa‘s bond market also recorded modest gains, with the yield on the benchmark 2035 government bond falling 7 basis points to 8.29%, reflecting stronger investor demand for government debt.
