South Africa’s rand fell on Monday in response to comments made by US President-elect Donald Trump over the weekend. Trump’s comments raised concerns about what his second term might mean for trade relations and the US dollar’s status as the global reserve currency. The rand traded at 18.22 against the US dollar, about 1% softer than its previous close.
Some market players expressed doubts that Trump’s comments would have a lasting impact on the currency, as a BRICS currency does not exist and would pose little risk to the US dollar’s status. However, others noted that Trump’s tariff threats provide a glimpse into what lies ahead in the coming years as he looks to improve existing trade agreements for the US’s benefit.
Meanwhile, a local purchasing managers’ index survey showed that South African manufacturing activity fell in November due to volatile demand conditions. Data from the country’s auto association showed new vehicle sales jumped more than 8% in the same month.
Local investors will look to South Africa’s third quarter gross domestic product numbers for further clues on the health of the country’s most industrialized economy. The blue-chip Top-40 index on the Johannesburg Stock Exchange closed about 1.6% up, while the benchmark 2030 government bond slipped, with the yield up 2.5 basis points to 8.94%.