South Africa's Rand opened strongly on Monday, as investors started the week on the front foot ahead of a slew of month-end economic data releases. The Rand traded at R18.02 against the Dollar, up 0.5% from its previous close. Local investor focus will turn towards several economic indicators due this week, including a business cycle indicator, producer inflation, trade and budget balance figures. The Rand has regained some ground against the greenback after US President-elect Donald Trump's selection of fund manager Scott Bessent as the next US Treasury secretary calmed emerging markets. The local central bank's conservative monetary policy stance with a smaller interest rate cut last week also helped the Rand.
Commodity-linked currencies including the Rand took a hit following the announcement on Tuesday that Trump will impose big tariffs on the United States' three largest trading partners – Canada, Mexico and China. This saw the Rand drop to R18.22 against the Dollar before closing at R18.15. Wednesday and Thursday brought some fightback for the Rand against the Dollar after unchanged inflation data from the US and the central bank's November Financial Stability Review. Domestic producer price inflation figures for October were also down on the previous month which showed an easing of tough economic conditions locally. The Rand closed out on Thursday at R18.06 against the Dollar.
The Rand traded at R18.03 against the Dollar on Friday, about 0.4% stronger than its previous close. South Africa's budget deficit widened to 46.08 billion rand in October, National Treasury data showed, while trade surplus increased slightly to 14.63 billion Rand in the same month, according to revenue service figures. South Africa's M3 money supply growth last month was at 7.79%, up from 7.25% in September. Credit growth for October came in at 4.26%, from 4.63% in the previous month, central bank data showed on Friday. This was mixed local data as the consumer spending and money supply increased but the national budget was still getting worse, which saw the Rand close the week off at R18.03 against the Dollar, almost unchanged to where it opened.
Upcoming market events
Wednesday, 4 December
- ZAR – Consumer confidence
- USD – ISM services PMI
- USD – Fed Chair Powell speech
Thursday, 5 December
- ZAR – Current account
Friday, 6 December
- ZAR – Forex reserves
- USD – Nonfarm payrolls
- USD – Unemployment rate