Latest news with #TreasuryONE
Business Recorder
3 days ago
- Business
- Business Recorder
South African rand falls back after strong gains
JOHANNESBURG: The South African rand retreated on Friday following strong recent gains, but analysts said the outlook for the currency remained positive. The rand traded at 17.94 against the dollar at 1340 GMT, about 0.7% weaker than Thursday's closing level. The currency was hurt by dollar strength, as well as investor uncertainty over U.S. President Donald Trump's tariff war. 'Local factors remain positive for the rand, but concerns over the U.S. fiscal debt, tariff uncertainty, and trade war fears are likely to see some consolidation between 17.70 and 18.00 (to the dollar) in the short term,' Andre Cilliers, currency strategist at TreasuryONE, said in a research note. The rand advanced on Thursday, buttressed by the central bank stressing its strong preference for a lower inflation target at a monetary policy announcement. The South African Reserve Bank (SARB) presented detailed modelling of the impact of a 3% inflation target, compared to the 4.5% level it aims for at the midpoint of its current 3% to 6% target range. The SARB, which resumed interest rate cuts on Thursday after a pause in March, added that its Monetary Policy Committee felt a 3% target was 'more attractive' and said it would continue to consider scenarios based on that target at future rate meetings. 'Investors focused on the implications of a lower target, namely lower inflation, reduced interest rates, bond market inflows, and stronger long-term growth, which further support the rand,' ETM Analytics said. On the Johannesburg Stock Exchange, the Top-40 index last traded down 0.7%. The benchmark 2035 government bond was marginally stronger, as the yield fell 1.5 basis points to 10.155%.
IOL News
6 days ago
- Business
- IOL News
Rand in favour as dollar drops on back of Trump's policies
South Africa's local currency is hanging on below R18 to the dollar on the back of a weaker US dollar – a position US President Donald Trump seems to favour. Investec chief economist, Annabel Bishop, said in a note that this was because the US dollar's weakness was a major support. 'The greenback has dropped sharply from recent highs, on concerns over US tariffs and the US President seen to favour US dollar weakness,' she said. The currency opened at R17.89 on Tuesday morning, more or less on par with where it has been over the past about two weeks. By mid-morning, it was at R17.93. South Africa's local currency is hanging on below R18 to the dollar on the back of a weaker US dollar – a position US President Donald Trump seems to favour. However, even as investors turn to riskier assets, the rand is only in ninth place in the Bloomberg emerging market currency basket ranker. Bishop noted that Trump apparently wants a weaker dollar for trade support. Recently, that country's President has been negotiating trade tariffs with several major markets, including South Africa, after shocking the world and US markets with high and unexpected import duties on April 2 – his so-called 'liberation day'. Trump later backtracked some of these taxes, dropping them to 10% for 90 days as of April 3, bringing a sigh of relief to markets. However, the rand's strength against the dollar is not reflected in other forex trades, noted Bishop and it has not gained as much as some other currencies, including those of the Philippines, Thailand, and Malaysia. Bishop also pointed out that the rand has weakened against the euro and against the UK pound. 'The rand has not strengthened on its own, but reflects US dollar weakness,' she said. Andre Cilliers, currency strategist at TreasuryONE, seems to disagree, stating that the rand is the 'star performer amongst emerging market and risk-sensitive currencies'. Bianca Botes, director at Citadel Global added that the rand is 'taking its cues from the global landscape and the South African Reserve Bank interest rate decision, which will be released later this week'. IOL
Business Recorder
22-05-2025
- Business
- Business Recorder
South African rand steady after fraught Ramaphosa-Trump meeting
JOHANNESBURG: South Africa's rand was steady on Thursday, as markets tried to digest US President Donald Trump's Oval Office ambush of South African leader Cyril Ramaphosa, which overshadowed the country's budget presentation. At 0746 GMT, the rand traded at 17.965 against the dollar , not far from its previous close on Wednesday and near a five-month high. South African Finance Minister Enoch Godongwana tabled the 2025 budget for the third time on Wednesday, after scrapping plans to raise value-added-tax, the most contentious element in his two previous attempts. The market focus quickly shifted to Ramaphosa's meeting with Trump, however, which the South African leader had hoped would help reset strained ties between the two nations after Trump suspended aid to South Africa earlier this year, citing its land reform policy and its genocide case against Israel. However, Trump confronted Ramaphosa in the White House with false allegations of mass killings of white people and land seizure, which the South African leader pushed back against. Following a bilateral meeting with Trump, Ramaphosa told reporters that the two countries had agreed to discuss critical minerals in South Africa, but did not provide details. A trade and investment proposal was also submitted, which includes buying liquefied natural gas from the United States, his trade minister said. South African rand near five-month high before budget, Trump meeting 'One hopes that more constructive talks around trade and bilateral relations took place behind closed doors, but as yet, there have been no updates,' said Andre Cilliers, currency strategist at TreasuryONE. On the stock market, the Top-40 index was down about 0.7%. South Africa's benchmark 2030 government bond was weaker, with the yield up 2 basis points to 8.90%.
Business Recorder
16-05-2025
- Business
- Business Recorder
South African rand eases from five-month high
JOHANNESBURG: South Africa's rand eased from its strongest level in five months on Friday, a dayafter a minister said that a new inflation-targeting plan was imminent. At 1425 GMT, the rand traded at 18.095 against the dollar , about 0.4% weaker than its previous close. It hit 17.9925 per dollar in the morning session for the first time since mid-December. Markets welcomed Deputy Finance Minister David Masondo's comments at an investor conference on Thursday that anannouncement would be made 'very soon' about South Africa's inflation-targeting regime. The central bank's current inflation target is a 3-6% range and its governor Lesetja Kganyago has for years argued for a lower target. 'With little data on the economic front, markets' attention will likely remain on international geopolitics,' said AndreCilliers, currency strategist at TreasuryONE. South African rand recoups losses, power cuts in focus President Cyril Ramaphosa is scheduled to meet his U.S. counterpart Donald Trump next week in a bid to reset strained ties. Ramaphosa's spokesperson Vincent Magwenya told the broadcaster SABC late on Thursday that the visit would be short and would not involve a large delegation. On the stock market, the Top-40 index was up 0.2%. South Africa's benchmark 2030 government bond was marginally stronger, with the yield down 0.5 basis point to 8.865%.
IOL News
16-05-2025
- Business
- IOL News
Rand flexes its muscles against the dollar as new inflation targeting plans roll in
Having started Friday off at R18.01 to the dollar – its lowest point since December 12 last year – the local currency had only lost 3c by lunch time driven by a better geopolitical situation. Andre Cilliers, currency strategist at TreasuryONE, said the rand firmed to its best level for the year so far after Deputy Finance Minister David Masondo said the country may introduce a new inflation targeting plan. Bianca Botes, director at Citadel Global, added the rand strengthened nearly 1% to around R18.01 this morning as it benefitted from news that a new inflation target will be announced imminently. South African Reserve Bank Governor Lesetja Kganyago has been publicly suggesting that the target band of between 3% and 6% be shrunk to 3% for some time. This, however, will require a policy change from National Treasury. After starting the day at R18.01 to the dollar, the South African rand shows signs of strengthening, driven by potential changes in inflation targeting and positive geopolitical developments. Image: Morningstar Should the target band be narrowed, it's less likely that interest rates will come down, which supports the currency and will encourage international investors, dropping the rand against the dollar. Nolan Wapenaar, Anchor Capital co-chief investment officer, said domestic politics are also supportive of the rand as the message 'that we expect the Government of National Unity to pass the National Budget 3.0 was well received'. The National Budget will be presented next Wednesday. Botes said the local currency was buoyed by a weaker greenback and anticipation of a key meeting between President Cyril Ramaphosa and US President, Donald Trump. That meeting is apparently set for later this month. 'Despite this, domestic challenges like renewed power cuts and fiscal uncertainty continue to weigh on South Africa's outlook,' Botes added. Yet, said Cilliers, with little data on the economic front, markets' attention will likely remain on international geopolitics. Wapenaar said the stronger rand follows the continued recovery of global financial market sentiment as tariff issues seem to be getting resolved with US President Donald Trump having a successful trip to the Gulf. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Trump signed several trade deals during his visit to the Gulf this week, including with Saudi Arabia, Qatar and the United Arab Emirates. Botes said, 'early optimism from a temporary US-China tariff reduction pushed the dollar higher at the start of the week, but that momentum faded as softer US inflation and disappointing retail sales data raised doubts about consumer strength'. These economic signals led traders to expect more interest rate cuts from the Fed, while the dollar also lost ground against several Asian currencies amid speculation of a strategic push for a weaker currency in trade talks, said Botes. Cilliers also noted that the US currency has been battling to hold its own this week over mixed economic data and optimism over a trade truce. These, he said, have been the main factors influencing the dollar this week, as it struggles to hold onto gains. IOL
