JOHANNESBURG: The South African rand was subdued in early Wednesday trade, pressured by a rebounding US dollar and a contraction in December’s local Purchasing Managers’ Index, the sharpest drop in business activity since January 2025.
At 0646 GMT, the rand traded at 16.38 against the dollar , about 0.2% weaker than its close on Tuesday.
The S&P PMI fell to 47.7 from 49.0 in November as demand waned and firms reduced purchases and inventories.
ETM Analytics said in a research note that despite the downturn, business confidence remained resilient, with optimism for 2026 fuelled by expectations of new projects, stronger sales and an improving economy.
“For now, the USD-ZAR is consolidating its recent retreat. Sentiment towards SA continues to run high, with the JSE rising to fresh record levels, and bond yields remaining subdued,” ETM Analytics said.
“The current market dynamics are supportive of the ZAR, which should ensure that the ZAR remains strong for some time to come,” it added.
The rand ended 2025 nearly 13% stronger against the U.S. dollar, its biggest annual gain in 16 years as the greenback weakened broadly.
South Africa’s benchmark 2035 government bond was firm in early deals, as the yield fell 5 basis points to 8.215%.
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