Market News

Tannur Anders

JOHANNESBURG, Nov 15 (Reuters) – The South African rand gained on Friday as the U.S. dollar slipped, but analysts said pressure could soon build again as bets on U.S. President-elect Donald Trump’s policies remain a key market driver.

At 1331 GMT, the rand traded at 18.1450 against the dollar ZAR=D3, about 0.6% stronger than its previous close.

“The rand is seeing a boost today as the U.S. dollar rally pauses. Profit-taking before the weekend might be influencing this, but it’s likely temporary,” said Zain Vawda, market analyst at MarketPulse by OANDA.

The rand endured five consecutive sessions of losses until Friday, losing about 5% against the dollar, as the U.S. currency surged following Trump’s election victory.

Global markets remain focused on the impact of Trump’s win, with the dominant view that after he takes office in January his policies could stoke U.S. inflation, meaning fewer Federal Reserve interest rate cuts.

Locally, investors will look to S&P Global’s scheduled review of South Africa’s sovereign credit rating on Friday.

Analysts expect Africa’s most industrialised economy to remain three notches into sub-investment grade at ‘BB-‘, with a stable outlook.

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“An upgrade is unlikely. As things stand, risk remains skewed toward further rand weakness,” Vawda added.

Next week, South Africa-focused investors will look to October’s inflation print ZACPIY=ECI on Wednesday and the South African Reserve Bank’s monetary policy decision ZAREPO=ECI a day later.

The central bank is expected to cut the repo rate by 25 basis points, the same size of cut as in September, according to a Reuters poll of economists published on Friday.

On the Johannesburg stock market, the blue-chip Top-40 index .JTOPI was up about 0.1%.

South Africa’s benchmark 2030 government bond ZAR2030= was flat, with the yield at 9.135%.

(Reporting by Tannur Anders; Editing by Alexander Winning and Mark Potter)