The South African rand fell in trading on Wednesday morning, weighed down by a rebound in the US dollar and a contraction in the domestic purchasing managers' index for December, recording the largest decline in business activity since January 2025.
The rand was trading at the level of 16.38 against the US dollar, a decrease of approximately 0.2% compared to the close of Tuesday’s session. Despite this decline, ETM Analytics indicated in a research note that business confidence remains strong, supported by broad optimism about the year 2026, in light of expectations of launching new projects and improving sales and economic performance.
The company explained that the US dollar/South African rand pair is currently continuing to consolidate its recent decline, pointing out that positive sentiment towards South Africa remains high, with the Johannesburg Stock Exchange index recording new record levels, and government bond yields continuing to decline. ETM Analytics added that the current market dynamics support the South African currency, which makes it likely that the rand will remain strong during the coming period.
The rand had ended the year 2025 with gains of approximately 13% against the US dollar, in its largest annual rise in 16 years, benefiting from the broad weakness of the dollar in global markets.
Bond market: The performance of standard government bonds due in 2035 stabilized during early trading, with the yield declining by about 5 basis points to reach 8.215%.
