The rand began the week on a cautious note as markets anticipated a busy data calendar and the BRICS summit, events that could impact its stability. The currency opened at R17.57 against the US dollar, experiencing modest fluctuations early on, with the USD/ZAR pair trading narrowly between R17.54 and R17.58. Tuesday brought some strength for the rand, which peaked at R17.49 to the dollar (its best level of the week) before closing at R17.51 to the dollar as the market awaited Wednesday’s inflation report.
On Wednesday, inflation numbers came in lower than expected at 3.8%, against a forecast of 4.1%, providing a brief boost for the rand. However, the BRICS summit introduced volatility, triggering the rand’s largest single-day drop in two months. The rand surged to a high of R17.86 to the dollar before settling at R17.74 amid geopolitical tensions. President Ramaphosa’s reference to Russia’s President Putin as “a valued ally” stirred criticism from coalition partner DA’s John Steenhuisen, who cautioned that this could strain South Africa’s international trade relations, particularly with the US. The discord intensified as Ramaphosa’s office defended his stance, asserting he would not be “micro-managed” on foreign policy, underscoring tensions within the GNU coalition.
The rand found stability on Thursday and Friday, managing to recover some of its losses to close at R17.62 to the dollar by the end of the week, reflecting a more resilient position despite the political and economic challenges.
Upcoming market events
Wednesday, 30 October
- EUR – GDP growth rate
Thursday, 31 October
- EUR – Inflation rate
- USD – Core PCE price index
Friday, 1 November
- USD – Nonfarm payrolls
- USD – Unemployment rate
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