JOHANNESBURG (Reuters) – South Africa’s rand weakened early on Tuesday against a buoyant U.S. dollar as markets digested U.S. President Donald Trump’s changing tariff stance.
At 0555 GMT, the rand traded at 18.79 against the dollar, about 0.4% lower than Monday’s close. The dollar last traded about 0.3% firmer against a basket of currencies.
Trump on Monday suspended his threat of steep tariffs on Mexico and Canada, agreeing to a 30-day pause in return for concessions on border and crime enforcement with the two neighbouring countries.
The U.S. imposed tariffs on Chinese imports on Tuesday and China quickly responded.
“What we are seeing is that Trump is looking for concessions, while he negotiates,” said Adam Phillips, treasury specialist at Umkhulu Treasury.
“What is clear is that a risk premium is being added into the foreign exchange market and this is going to be around for a while.”
The rand traded turbulently on Monday, slumping almost 2% in early trade on news that Trump would suspend funding to South Africa, but staged a recovery later to close roughly flat.
South Africa’s benchmark 2030 government bond was stronger in early deals on Tuesday, with the yield down 5.5 basis points to 9.09%.
(Reporting by Tannur Anders; Editing by Sumana Nandy)
