South Africa’s rand weakened against a strong dollar on Tuesday January 21, following U.S. President Donald Trump’s announcement of a series of policy changes after his inauguration on Monday.
At 15:32 GMT, the rand traded at 18.5325 against the U.S. dollar, roughly 0.1% weaker than its previous close. The rand had appreciated by about 1% on Monday in anticipation of Trump’s swearing-in. Meanwhile, the dollar strengthened by about 0.2% against a basket of currencies.
Adam Phillips, treasury specialist at Umkhulu Treasury, stated that it is prudent to wait until Trump’s administration is fully established before any decisions on tariffs are made. Like other risk-sensitive currencies, the rand is influenced by global factors such as U.S. fiscal policy, in addition to local developments. Domestically, South Africa’s mining output fell by 0.9% year-on-year in November, compared to a revised increase of 1.1% in October, according to Statistics South Africa data released on Tuesday.
Looking ahead, attention on Wednesday will be on South Africa’s December inflation data, with economists polled by Reuters predicting an annual rate of 3.2%. On the Johannesburg Stock Exchange, the blue-chip Top-40 index closed about 0.2% higher. Meanwhile, South Africa’s benchmark 2030 government bond strengthened, with the yield dropping by 7.5 basis points to 9.095%.