The South African rand weakened on Wednesday, easing from a recent rally as investors moved to take profits ahead of key global economic developments.
By 12:30 GMT, the rand was trading at 18.2825 to the US dollar, representing a decline of roughly 0.5% from Tuesday’s closing level. This drop follows four consecutive sessions of gains for the currency.
According to TreasuryONE’s currency strategist Andre Cilliers, the dip reflects traders adjusting their positions ahead of the US Federal Reserve’s anticipated interest rate announcement. The Fed is widely expected to hold rates steady amid ongoing worries over a slowdown in the US economy, which has been exacerbated by tariffs imposed by President Donald Trump.
Investor sentiment was somewhat buoyed by news that US and Chinese officials are scheduled to meet for trade talks this coming weekend. The discussions have raised hopes for a resolution to the prolonged trade war that has unsettled global financial markets and disrupted international trade flows.
Locally, no significant South African economic indicators are due for release on Wednesday. However, President Cyril Ramaphosa is set to launch the second phase of an economic reform programme aimed at enhancing the country’s growth potential.
On Thursday, investors will turn their attention to domestic manufacturing figures and foreign reserves data. Meanwhile, the Johannesburg Stock Exchange’s Top-40 index was down 0.3% in its latest trading, and the benchmark 2030 government bond remained unchanged, with its yield at 8.92%.