The South African rand experienced a downturn on Monday, influenced by statements over the weekend from U.S. President-elect Donald Trump, which caused unease among traders in the BRICS bloc of emerging economies, including South Africa, Brazil, Russia, India, and China. At 1506 GMT, the rand was valued at 18.22 against the U.S. dollar, marking a 1% decrease from its previous close. Trump's demand for BRICS nations to refrain from creating or supporting a new currency to rival the dollar, under threat of 100% tariffs, has sparked speculation about future trade relations.
While some market analysts, like Danny Greeff from ETM Analytics, believe the impact on the rand may be temporary due to the non-existence of a BRICS currency and its minimal threat to the dollar's global reserve status, the potential for future tariff threats underlines the uncertain trade landscape. Additionally, South Africa's economic indicators showed mixed results, with a decline in manufacturing activity in November due to fluctuating demand, contrasted with an over 8% increase in new vehicle sales. Investors are poised for the release of South Africa's third-quarter GDP figures for further insights into the country's economic condition. Meanwhile, the Johannesburg Stock Exchange's Top-40 index saw a 1.6% rise, but the nation's benchmark 2030 government bond yield increased slightly to 8.94%.
Source: Reuters