JOHANNESBURG (Reuters) -The South African rand jumped on Monday as markets waited for U.S. President-elect Donald Trump’s policy announcements for clarity on his administration’s fiscal stance.
At 1430 GMT the rand traded at 18.58 against the U.S. dollar, about 1% stronger than its previous close. The greenback was down about 1% against a basket of currencies.
Trump will be inaugurated as the 47th U.S. president later on Monday.
“The next few days will give some clarity on the Trump’s administration policies, and so the rand could see some further volatility,” said Annabel Bishop, chief economist at Investec.
Investors seek clarity on Trump’s tariff and tax plans.
“A moderate tariff increase trajectory would imply less upwards pressure on U.S. inflation, and in turn, more opportunity for U.S. interest rate cuts, which has added to the rand’s recent mild strength,” Bishop added.
Domestic investors will focus this week on South Africa’s November mining production data on Tuesday, the December consumer inflation reading on Wednesday and November retail sales figures on Thursday.
On the Johannesburg Stock Exchange, the blue-chip Top-40 index last traded about 0.1% up.
South Africa’s benchmark 2030 government bond was slightly stronger, with the yield down 5.5 basis points to 9.155%.
(Reporting by Tannur Anders and Sfundo Parakozov, Editing by David Goodman and Ed Osmond)
