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The South African rand held steady in early trading on Monday as investors remained cautious amid renewed U.S.-China trade tensions and expectations of Federal Reserve rate cuts, with the U.S. government shutdown now in its thirteenth day.
At 0826 GMT, the rand traded at 17.3175 to the dollar, roughly 1% stronger than Friday’s close.
Like other risk-sensitive currencies, the rand is heavily influenced by global trends, particularly U.S. economic data and monetary policy decisions. “Risk appetite appears to be back at this week’s start, so one should expect the ZAR to make a modest recovery,” ETM Analytics said in a research note.
The dollar index, which tracks the greenback against a basket of major currencies, rose 0.1%.
Local investors are now awaiting key economic indicators — including the business confidence index, mining production, and retail sales data — for insight into the health of Africa’s largest economy.
ETM Analytics cautioned that “a harsh reminder of the opportunity cost SA has suffered will likely come in the form of the latest mining production data later this week, highlighting SA’s inability to take advantage of the commodity price boom.”
On the Johannesburg Stock Exchange, the Top-40 index (.JTOPI) climbed 0.2% in early trade. Meanwhile, South Africa’s benchmark 2035 government bond edged higher, with the yield dipping two basis points to 9.105%.
