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South African rand inches up; US bill and tariff updates in focus

ReutersJul 4, 2025 7:05 AM

- The South African rand inched up against a weaker dollar in early trade on Friday, as traders considered the impact of the sweeping tax-cut and spending bill U.S. President Donald Trump is about to sign into law and as pressure mounted on countries to secure trade deals before the United States' July 9 deadline.

At 0700 GMT the rand traded at 17.5250 against the dollar ZAR=D3, just 0.1% firmer than Thursday's closing level.

The U.S. Republican-controlled House of Representatives narrowly passed Trump's "One, Big, Beautiful Bill" of spending and tax cuts.

"The upside to this bill is that it will likely boost U.S. demand in the short-to-medium term. The downside is that forecasts are pessimistic on whether it will successfully generate enough GDP growth to outpace the increased spending," ETM Analytics said in a research note.

Like other risk-sensitive currencies, the rand often takes cues from global drivers like U.S. policy and economic data in addition to local factors.

Domestically focussed traders will also eye June foreign reserves ZAFXRS=ECI data on Monday and May manufacturing production ZAMAN=ECI figures on Thursday for insight into the health of Africa's most industrialised economy.

South Africa along with many other countries are scrambling to agree trade deals with the United States before Trump's July 9 deadline.

But the U.S. leader said Washington will start sending letters to countries on Friday specifying what tariff rates they will face on imports to the United States, a clear shift from earlier pledges to strike scores of individual deals.

South Africa's benchmark 2035 government bond ZAR2035= was weaker in early deals, as the yield rose 3 basis point to 9.77%.

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