JOHANNESBURG (Reuters) -South Africa’s rand strengthened against a weaker dollar on Friday after U.S. President Donald Trump demanded lower interest rates from the Federal Reserve, with eyes also on the South African Reserve Bank’s (SARB) rate decision next week.
At 1406 GMT, the rand traded at 18.37 against the U.S. dollar, about 0.9% firmer than its previous close.
The greenback last traded about 0.4% weaker against a basket of currencies.
Data out of the world’s biggest economy on Thursday showed a rise in weekly jobless claims, while Trump, speaking virtually at the World Economic Forum meeting at Davos, said he would demand lower interest rates.
The jobless claims and Trump’s remarks led to a revision of U.S. rate cut expectations and drove U.S. Treasury yields lower on Friday, ETM Analytics said in a research note.
But analysts said that although dollar weakness supports the local currency, tariff risks posed by Trump and a fragile global sentiment could limit further gains.
Domestically focused investors will look to the SARB’s first interest rate decision for 2025 on Thursday, in which economists polled by Reuters estimate a 25 basis point cut to 7.50%.
“With the SARB, Fed and (European Central Bank) meetings ahead, central bank guidance will heavily influence (foreign exchange) and bond markets,” said Andre Cilliers, currency strategist at TreasuryONE.
On the Johannesburg Stock Exchange, the blue-chip Top-40 index last traded up more than 0.8%.
South Africa’s benchmark 2030 government bond was stronger, with the yield down 3.5 basis points to 9.02%.
(Reporting by Tannur Anders and Sfundo Parakozov; editing by Mark Heinrich and Bhargav Acharya)
