On Friday, the South African rand climbed, although it gave up some of its early gains as the dollar gained momentum. Since the beginning of the year, investor mood and trade actions have been swinging back and forth due to uncertainties about the extent and timing of possible US monetary tightening. Following less aggressive comments from Federal Reserve Chairman Jerome Powell and largely in line unemployment data in the United States, Fed Governor Lael Brainard said on Thursday that rates will rise in March, helping the dollar's recovery.
The rand was trading at 15.3579 vs the dollar at 1540 GMT, up 0.27 percent from its previous close, although in choppy activity. On Friday, the dollar appeared to be on course to end a three-day losing trend versus a basket of currencies.
“The South African rand has soared against the US dollar since late November 2021, but this may be coming to an end with the Federal Reserve bolstering its already hawkish narrative – favoring a 'buy the dip' strategy,” Warren Venketas, currency analyst at DailyFX, said in a note.According to him, the rand bounce may be coming to an end as the country's shaky economic and political background takes its toll. Following global markets, South Africa's stock market finished down, with banking, financials, mining, and industrials shedding much of their recent gains.
The all-share index (.JALSH) fell 1.01 percent to 75,160 points, while the blue-chip index of the top 40 businesses (.JTOPI) down 1.07 percent to 68,448 points. However, because to a strong mid-week run in tech, commodities, and financial companies, the indices were still over 1.6 percent up on the week. On Friday, the price of the government's benchmark 2030 bond increased, while the yield fell 0.5 percentage points to 9.365 percent.
