The South African rand weakened against the U.S. dollar ahead of GDP figures, trading at 18.64. Investors are concerned about U.S. tariffs announced by President Trump and their potential economic impact. Analysts predict a 0.9% GDP growth, while budget uncertainties pose additional risks. The Johannesburg Stock Exchange’s Top-40 index fell by 0.7%.
On March 4, 2023, the South African rand experienced a decline as it traded at 18.64 against the U.S. dollar, reflecting a 0.3% decrease compared to its previous close. This weakening occurred ahead of the anticipated release of local gross domestic product (GDP) figures and amid concerns regarding the economic impact of tariffs implemented by U.S. President Donald Trump.
President Trump announced that 25% tariffs on Canadian and Mexican goods would take effect on Tuesday, with reciprocal tariffs set to start on April 2. Investors in South Africa are particularly focused on the GDP data to be released at 0930 GMT, which is forecasted to show a 0.9% expansion, indicating the performance of the nation’s economy.
“A stronger (GDP) print could support ZAR (the rand), but budget concerns remain a risk factor,” stated Andre Cilliers, a currency strategist at TreasuryONE, highlighting uncertainties stemming from the ruling coalition’s indecision on the national budget, which had been delayed last month.
Meanwhile, the Johannesburg Stock Exchange’s blue-chip Top-40 index showed a decrease of approximately 0.7%. Additionally, the yield on South Africa’s benchmark 2030 government bond remained stable at 9.085% during early trading activities.
In summary, the South African rand is under pressure due to the looming impact of U.S. tariffs and upcoming GDP data, which is crucial for gauging economic strength. The market is wary of potential budget issues within the ruling coalition, further complicating the economic outlook. Investors are closely monitoring these developments as they navigate their financial strategies.
Original Source: www.cnbcafrica.com
