The South African rand remained stable at the start of trading on Wednesday (11), as investors monitored developments in the Middle East and awaited two important US inflation reports that could indicate the direction of the US Federal Reserve’s monetary policy.
The rand was trading at 16.3050 per dollar, virtually unchanged from Tuesday’s closing level.
The currency found some relief after US President Donald Trump said the conflict in the Middle East could end soon, after hitting a three-month low of around 16.90 per dollar on Monday.
However, investors remain cautious as Trump continued to threaten tough measures against Iran due to disruptions in the flow of energy through the Strait of Hormuz.
“The rise in the USD-ZAR pair, which occurred with the escalation of the war, appears to be reversing rapidly. If this trend continues for the rest of this week and next, the impact of the USD-ZAR on inflation and GDP growth will be limited,” ETM Analytics said in a research note.
The US dollar remained stable against a basket of currencies, as markets await the release of the US Consumer Price Index (CPI) for February, scheduled for later today, and the Personal Consumption Expenditures (PCE) index — the Fed’s preferred inflation indicator — on Friday (13).
Like other risk-sensitive currencies, the rand tends to react to global factors in addition to domestic economic data.
Domestically, investors will be watching this week for the release of mining and industrial production data for January, as well as current account data for the fourth quarter of 2025, for clues about the health of the continent’s most industrialized economy.
On the Johannesburg Stock Exchange, the top 40 index was up 1.8%.
The South African government’s benchmark bond maturing in 2035 strengthened slightly in early trading, with the yield falling 1 basis point to 8.425%.
Source: Reuters
