JOHANNESBURG, August 5 (Reuters) -The South African rand was little changed in muted trade on Tuesday even after the release of a positive purchasing managers’ index survey as investors continued to wait for tariff updates ahead of the United States’ August 8 deadline.
The rand was at 17.9225 against the dollar by 1533 GMT, a whisker away from Monday’s close.
South Africa’s private sector expanded slightly in July, marking the third consecutive month of growth helped by renewed sales growth and sustained employment increases, a survey showed on Tuesday.
This was, however, overshadowed by tariff concerns after the United States imposed a 30% duty on goods imported from the country, the highest rate among Sub-Saharan African countries.
South Africa has tried for months to negotiate a deal with U.S. President Donald Trump’s administration and offered to buy U.S. liquefied natural gas and invest in its industries in exchange for a lower tariff.
But Trump’s team was unresponsive to the proposal, which came amid tensions between Washington and Pretoria over South Africa’s foreign policy and domestic affirmative action laws, which Trump disapproves of.
“More threats loom, and one may be a further rise in U.S. tariffs based on SA’s membership of BRICS (grouping Brazil, Russia, India, China and South Africa),” said ETM Analytics in a note.
“Over time, SA will diversify its trade links away from the U.S. and reduce any future leverage the U.S. may hold over SA, but for now, SA needs to brace for more disruption, which at the margin will impact the economy negatively and limit the full extent of rand appreciation,” it said.
The Johannesburg Stock Exchange’s Top-40 index was last up 0.4%
South Africa’s benchmark 2035 government bond was weaker, as the yield rose 4.5 basis points to 9.675%.
(Reporting by Sfundo Parakozov;Editing by Gareth Jones and Emelia Sithole-Matarise)
