Johannesburg — The South African rand strengthened early on Friday after U.S. President Donald Trump said he planned to impose reciprocal tariffs on countries taxing U.S. imports, and investors awaited a domestic budget next week.
At 0753 GMT, the rand traded at 18.4275 against the dollar, about 0.3% stronger than its previous close. The dollar came under pressure overnight.
Trump on Thursday tasked his economic team with planning for reciprocal tariffs on every country taxing U.S. imports, ramping up prospects for a global trade war.
Concerns of a trade war lifted gold prices, which were poised for a seventh consecutive weekly gain. The surge in prices of the safe-have asset is supportive of the South African currency, said ETM Analytics in a research note.
“The environment is ZAR-supportive, and the USD-ZAR may even break below the 18.4000 level in the coming trading session,” the note added.
ETM Analytics said the only major constraint to any directional move is South African Finance Minister Enoch Godongwana’s budget speech next week and the guidance he will offer investors.
On the Johannesburg Stock Exchange, the blue-chip Top-40 index last traded about 1.1% higher.
South Africa’s benchmark 2030 government bond was stronger in early deals, with the yield down 3.5 basis points to 9.13%.
*Sfundo Parakozov, editing: Tannur Anders – Reuters
