{"id":41859,"date":"2025-04-09T16:59:55","date_gmt":"2025-04-09T16:59:55","guid":{"rendered":"https:\/\/www.premium-partners.net\/?p=41859"},"modified":"2025-04-09T18:36:56","modified_gmt":"2025-04-09T18:36:56","slug":"rand-in-free-fall-currency-nears-r20-as-markets-turn-wild-on-trade-wars","status":"publish","type":"post","link":"https:\/\/www.premium-partners.net\/fr\/builder\/rand-in-free-fall-currency-nears-r20-as-markets-turn-wild-on-trade-wars\/","title":{"rendered":"Rand in free fall: Currency nears R20\/$ as markets turn wild on trade wars"},"content":{"rendered":"

This post<\/a> was originally published on this site<\/a><\/p>

<\/p>\n

The rand hit a concerning milestone on Wednesday, crossing the R19.80 mark against the US dollar, reflecting deeper turmoil as the United States and China trade war went up a notch with retaliatory tariffs. <\/span><\/p>\n

Despite a recent weakness of the dollar, the rand found itself trading on the backfoot throughout Wednesday, weakening by 0.4% to R19.82\/$1 by 6pm, illustrating the unique challenges faced by South Africa in a time of rising global trade tensions.<\/span><\/p>\n

The rand set its record low at the height of uncertainty during the COVID crises as investors pulled back on all risk positions and also traded within a whisker of the R20 to the US dollar in June 2023 when the US Ambassador falsely accused South Africa of supplying arms to Russia.<\/span><\/p>\n

The US announced that it would impose a 104% tariff on Chinese goods from Thursday, and China also announced an additional 50% tariffs on US goods to be implemented the same day, taking the tariffs up to 84%. <\/span><\/p>\n

The rising unilateralism and protectionism in the US have significantly impeded normal economic and trade cooperation between the two largest economies in the world and South Africa\u2019s largest trading partners. <\/span><\/p>\n

Since the announced substantial import tariffs by US President Donald Trump last week, described by critics as ‘Liberation Day’, the rand has plummeted more than 5% against the greenback. <\/span><\/p>\n

Wichard Cilliers, director and head of market risk at TreasuryONE, said this made the rand the worst-performing currency in the world.<\/span><\/p>\n

\u201cThe rand is still trading weaker on the day, around the R19.80 levels and down around 7% in the month of April,\u201d Cilliers said.<\/span><\/p>\n

\u201cWe can expect the rand to remain under pressure due to global uncertainty surrounding tariffs. We also have our own local political issues to also sort out.\u201d <\/span><\/p>\n

Compounding these economic woes is the fracturing of South Africa’s coalition government over a contentious Value Added Tax (VAT) dispute. <\/span><\/p>\n

The coalition, which was seen as a critical stabilising force in a politically charged environment, has now come under intense scrutiny and criticism, further eroding confidence in the country’s economic governance. <\/span><\/p>\n

Nolan Wapenaar, co-chief investment officer at Anchor Capital, said the rand has faced an onslaught from domestic confidence flailing as the Government of National Unity (GNU) has displayed weakness and questions around its survival persisted.  <\/span><\/p>\n

Wapenaar said this was dampening the global enthusiasm for South African assets at a time when the Trump trade war has financial markets distressed and investor risk appetite is rapidly shrinking.  <\/span><\/p>\n

Wapenaar said that the rand could do anything in the near term, adding that a let up in the trade war would see some recovery while further escalation will see the rand trade weaker than R20 to the dollar.<\/span><\/p>\n

\u201cWe think that the fair-value for the rand is closer to R16.00 against the dollar. The massive risk-off sentiment means that the rand is significantly weaker than it ordinarily would be.  As the trade war escalates the rand can keep weakening.  It certainly could breach the R20 to a dollar level, though we do not think that the weakness will be sustained,\u201d Wapenaar said.<\/span><\/p>\n

\u201cFortunately the trade war is resulting in lower oil prices, so consumers are less likely to feel the weaker rand at the petrol pump.  Instead, we will see this come through as higher costs on goods with offshore inputs in supermarkets. This will also keep the interest rates in South Africa higher for longer again taking some money out of consumers\u2019 pockets.\u201d <\/span><\/p>\n

BUSINESS REPORT<\/strong><\/p>","protected":false},"excerpt":{"rendered":"

The rand hit a concerning milestone on Wednesday, crossing the R19.80 mark against the US dollar, reflecting deeper turmoil as the United States and China trade war went up a notch with retaliatory tariffs.\u00a0Despite a recent weakness of the dollar, the rand found itself trading on the backfoot throughout Wednesday, weakening by 0.4% to R19.82\/$1 by 6pm, illustrating the unique challenges faced by South Africa in a time of rising global trade tensions.The rand set its record low at the height of uncertainty during the COVID crises as investors pulled back on all risk positions and also traded within a whisker of the R20 to the US dollar in June 2023 when the US Ambassador falsely accused South Africa of supplying arms to Russia.The US announced that it would impose a 104% tariff on Chinese goods from Thursday, and China also announced an additional 50% tariffs on US goods to be implemented the same day, taking the tariffs up to 84%.\u00a0The rising unilateralism and protectionism in the US have significantly impeded normal economic and trade cooperation between the two largest economies in the world and South Africa\u2019s largest trading partners.\u00a0Since the announced substantial import tariffs by US President Donald Trump last week, described by critics as ‘Liberation Day’, the rand has plummeted more than 5% against the greenback.\u00a0Wichard Cilliers, director and head of market risk at TreasuryONE, said this made the rand the worst-performing currency in the world.\u201cThe rand is still trading weaker on the day, around the R19.80 levels and down around 7% in the month of April,\u201d Cilliers said.\u201cWe can expect the rand to remain under pressure due to global uncertainty surrounding tariffs. We also have our own local political issues to also sort out.\u201d\u00a0Compounding these economic woes is the fracturing of South Africa’s coalition government over a contentious Value Added Tax (VAT) dispute.\u00a0The coalition, which was seen as a critical stabilising force in a politically charged environment, has now come under intense scrutiny and criticism, further eroding confidence in the country’s economic governance.\u00a0Nolan Wapenaar, co-chief investment officer at Anchor Capital, said the rand has faced an onslaught from domestic confidence flailing as the Government of National Unity (GNU) has displayed weakness and questions around its survival persisted.\u00a0\u00a0Wapenaar said this was dampening the global enthusiasm for South African assets at a time when the Trump trade war has financial markets distressed and investor risk appetite is rapidly shrinking.\u00a0\u00a0Wapenaar said that the rand could do anything in the near term, adding that a let up in the trade war would see some recovery while further escalation will see the rand trade weaker than R20 to the dollar.\u201cWe think that the fair-value for the rand is closer to R16.00 against the dollar. The massive risk-off sentiment means that the rand is significantly weaker than it ordinarily would be.\u00a0 As the trade war escalates the rand can keep weakening.\u00a0 It certainly could breach the R20 to a dollar level, though we do not think that the weakness will be sustained,\u201d Wapenaar said.\u201cFortunately the trade war is resulting in lower oil prices, so consumers are less likely to feel the weaker rand at the petrol pump.\u00a0 Instead, we will see this come through as higher costs on goods with offshore inputs in supermarkets. This will also keep the interest rates in South Africa higher for longer again taking some money out of consumers\u2019 pockets.\u201d BUSINESS REPORT<\/p>","protected":false},"author":1,"featured_media":41861,"comment_status":"open","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-41859","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-builder"],"_links":{"self":[{"href":"https:\/\/www.premium-partners.net\/fr\/wp-json\/wp\/v2\/posts\/41859","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.premium-partners.net\/fr\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.premium-partners.net\/fr\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.premium-partners.net\/fr\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.premium-partners.net\/fr\/wp-json\/wp\/v2\/comments?post=41859"}],"version-history":[{"count":1,"href":"https:\/\/www.premium-partners.net\/fr\/wp-json\/wp\/v2\/posts\/41859\/revisions"}],"predecessor-version":[{"id":41860,"href":"https:\/\/www.premium-partners.net\/fr\/wp-json\/wp\/v2\/posts\/41859\/revisions\/41860"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.premium-partners.net\/fr\/wp-json\/wp\/v2\/media\/41861"}],"wp:attachment":[{"href":"https:\/\/www.premium-partners.net\/fr\/wp-json\/wp\/v2\/media?parent=41859"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.premium-partners.net\/fr\/wp-json\/wp\/v2\/categories?post=41859"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.premium-partners.net\/fr\/wp-json\/wp\/v2\/tags?post=41859"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}