South African rand firms against dollar, focus on president’s address

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South African rand firms against dollar, focus on president’s address

7:16 CAT | 06 Feb 2024

File photo: Reuters

South Africa’s rand was stronger on Tuesday, as the U.S. dollar slipped from the previous day’s 11-week high on lowered expectations of an early interest rate cut by the Federal Reserve.

At 1600 GMT, the rand traded at 18.8825 against the dollar ZAR=D3, over 1% stronger than Monday’s close.

The dollar index =USD was last down 0.13% at 104.32 against a basket of major currencies.

Investors will be looking toward President Cyril Ramaphosa’s State of the Nation Address (SONA) on Thursday to see what solutions are proposed to fix South Africa’s power crisis and rail and port problems, which have strangled growth in Africa’s most industrialised economy.

“An extended surge in the U.S. dollar may have driven some of the (rand’s) weakness, but SA has done itself no favours and will not stand out as a currency to buy unless the state takes dramatic reform action,” ETM Analytics said in a research note.

Shares on the Johannesburg Stock Exchange rose, with the blue-chip Top-40 index .JTOPI ending 0.86% higher.

South Africa’s benchmark 2030 government bond ZAR2030= was weaker, with the yield up 4 basis points to 9.845%.

Source: Reuters