The rand started at itsas it fluttered a few cents below R18.90 to the US dollar. Domestic politics were in a state of flux, as the ANC continued discussions with opposition parties regarding a potential government of national unity – a significant shift since they gained power 30 years ago.
There was a pattern throughout the week, which was that the dollar fought back after hours but during the South African trading desk time, the rand out powered the dollar and dropped the exchange rate. Monday and Tuesday’s rate drops were backed by investor confidence in reports of a coalition government and a surprise improvement in manufacturing production. Production was at 5.2%, its monthly highest since November 2021.
On Wednesday, the Federal Reserve maintained the US interest rates but inflation was lower than expected which further hinted at a US rate cut and the dollar took further damage. The US dollar slipped after news regarding Saudi Arabia and Russia moving away from the US Dollar and conducting transactions in other major currencies. Another announcement, by BRICS representatives, was that it is in the final stages of a new international payment system which rivals the global reserve US Dollar.
while the EFF and Jacob Zuma’s MK party joined forces to be the official opposition. With quite a seismic shift in South Africa’s political landscape dynamics, one can’t help but wonder how long this ‘unity’ can last between parties with diametrically opposed ideologies. The rand had a final flurry lower to end the day at a more-than-respectable R18.32 to the dollar.