Japan PPI inflation slips to 11-mth low in July
The South African rand strengthened against the dollar after former U.S. President Donald Trump announced plans for reciprocal tariffs on countries taxing U.S. imports.
According to Reuters, the local currency traded at 18.4275 per dollar, up 0.3% from its previous close, as the dollar came under pressure overnight.
President Trump, on Thursday, directed his economic team to prepare for reciprocal tariffs on all countries taxing U.S. imports, which heightened the possibility of a global trade war. Despite these concerns, gold prices, often considered a safe-haven asset, have been on the rise for seven consecutive weeks, which analysts at ETM Analytics believe supports the South African currency.
They noted, "The environment is ZAR-supportive, and the USD-ZAR may even break below the 18.4000 level in the coming trading session."
Investors are now looking ahead to South African Finance Minister Enoch Godongwana's budget speech scheduled for next week, which is expected to provide further guidance. ETM Analytics pointed out that the upcoming budget speech is the primary factor restraining any significant directional movements in the rand.
In the equities market, the Johannesburg Stock Exchange's blue-chip Top-40 index was trading approximately 1.1% higher. Additionally, the benchmark 2030 government bond in South Africa showed gains in early trading, with the yield dropping 3.5 basis points to 9.13%.
The global markets, meanwhile, remained buoyant with stock markets holding near record highs, and European indexes on track for their eighth consecutive weekly gain. This market sentiment was bolstered by President Trump's indication that the reciprocal tariffs would not be imposed immediately, suggesting there might be room for negotiation and averting immediate trade war escalation.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.