South Africa’s rand rollercoaster

The South African rand strengthened against the dollar on Friday, erasing earlier losses after a key report showed the US labour market cooled sharply over the past three months. 

The currency rose 0.9% to 18.06 per dollar as of 5:00 p.m. in Johannesburg, halting its longest losing streak since 2022. The rand had been under pressure recently as President Donald Trump pushed ahead with plans to impose a 30% tariff on South Africa’s exports to the US.

South Africa’s government is preparing a package to support companies hit by the tariffs as it continues talks with Washington on a new trade deal. The weak jobs data meanwhile adds to uncertainty over the direction of the world’s largest economy, raising the chance of Federal Reserve rate cuts.

“The impact of the tariffs is possible job losses as well as a potential decline in business confidence, which in turn could lead to stagnating economic growth,” said Lester Davids, a strategist at Unum Capital.

South Africa’s benchmark stock index pared losses after falling as much as 1.5%, the sharpest intraday drop since June 13.

Precious metals and mining stocks, including Anglogold Ashanti, led gains while Naspers and Financiere Richemont dragged.

On Thursday, South Africa’s central bank cut borrowing costs and announced the de facto adoption of a lower inflation target.

The yield on South Africa’s benchmark government bonds due February 2035 eased 11.2 basis points to 9.6%, the lowest in five years.