Online Reporter
The South African rand took a knock against a firmer dollar in early trade on Friday, as global markets remained on edge over US President Donald Trump’s tariff threats.
At 0713 GMT, the rand traded at 17.8550 against the dollar, about 0,7 percent weaker than Thursday’s close, as traders shunned riskier markets. The greenback last traded about 0,2 percent stronger against a basket of currencies.
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Domestically-focused investors will keep close tabs on updates from the government as it tries to negotiate a trade deal before an extended deadline of August 1, after which it faces a 30 percent trade tariff on its exports to the United States.
South Africa also faces an additional 10 percent tariff because of its membership of the BRICS group of developing nations, which Trump has described as “anti-American”.
This could further compound pressure on the already risk-sensitive rand, even as an ETM analytics research note said the currency was poised to benefit from an expected recovery in commodity prices.
“South Africa’s terms of trade have improved courtesy of the buoyancy of gold and platinum prices and the recent surge in copper prices,” ETM analytics said in the note.
“A study of commodity prices relative to the USD shows that the market is ripe for a US dollar correction and a recovery in commodity prices.”
South Africa is a major producer of precious metals and its rand, like other commodity-linked currencies, will be closely tracking developments from Washington following Trump’s threat to impose a 50 percent tariff on copper imports to the US.
Next week, the statistics agency will release mining output and retail sales, which will provide clues on the health of Africa’s most industrialised economy.
South Africa’s benchmark 2035 government bond was also weaker in early deals, with the yield rising 4.5 basis points to 9,83 percent. — Reuters
Peter Tanyanyiwa