KEY POINTS
- Rand steadies before key manufacturing output release.
- U.S. tariff talks weigh on South Africa’s trade outlook.
- Investors eye a week packed with economic data.
South Africa’s rand opened the week on a firmer footing Monday, edging higher ahead of fresh manufacturing figures and trade updates that could influence the country’s fragile growth outlook.
The rebound comes after the currency tumbled 4 percent on Friday, rattled by political tensions involving the finance minister.
Traders are also tracking negotiations with Washington, as Pretoria pushes for relief from a steep 30% U.S. import tariff—the highest among sub-Saharan African exporters. President Cyril Ramaphosa’s office said last week he had spoken directly with former U.S. President Donald Trump, with both sides agreeing to more detailed talks between their trade teams.
Rand steadies before manufacturing output release
At 0701 GMT, the rand traded at 17.7250 per dollar, about 0.2 percent stronger than Friday’s close. Statistics South Africa is set to release June manufacturing data at 1100 GMT, with May output showing a 0.5 percent year-on-year increase.
Analysts polled by Reuters expect a bigger 1 percent rise in June, while Nedbank economists forecast a 0.8 percent gain.
South Africa’s trade talks in Washington spotlight
Experts view the tariff negotiations as crucial for preserving South Africa’s export competitiveness, particularly in vital sectors like automotive, metals, and agriculture.
A prolonged 30 percent duty could dent volumes and investor sentiment, forcing the government to diversify trade routes and seek alternative buyers.
Markets brace for week of economic data
The week’s economic calendar also includes mining output and unemployment figures on Tuesday, followed by retail sales on Wednesday.
Investors are watching closely to gauge the health of Africa’s most industrialized economy amid persistent energy shortages and weak global demand. South Africa’s benchmark 2035 government bond was flat in early trade, with the yield holding at 9.63 percent.
