Rand weakens against stronger dollar; focus on mid-term budget

The rand weakened against a stronger US dollar on Tuesday, as investors awaited the government’s mid-term budget statement.

At 0634 GMT, the rand traded at R18.89 against the dollar.

Meanwhile, the dollar was last up 0.2% against a basket of currencies.

The main economic event in South Africa will be Wednesday’s medium-term budget policy statement, which updates economic forecasts, adjusts the budget and makes emergency changes to spending.

“Any sign that the government is focused on fiscal sustainability and reforms, and the rand could catch a strong bid tone,” ETM Analytics said in a note.

On Tuesday, investors are awaiting trade balance figures for September, which could ease some pressure on the rand if another trade surplus is posted, ETM said.

South Africa’s benchmark 2030 government bond was unchanged in early deals, with the yield at 10.705%.