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The South African rand weakened slightly by 0.08% to R18.57 per dollar Tuesday morning ahead of a flurry of economic data releases this week from the world’s biggest economy.
The dollar had ended Monday down about 0.8% against a basket of currencies after a report said US President-elect Donald Trump was mulling tariffs that would only be applied to critical imports. Trump denied the Washington Post report, according to a Reuters report.
US data releases this week include the Federal Reserve's December meeting minutes, and comments from its officials, which could shed light on the future interest rate movements. US jobless claims data is out on Thursday, and US payrolls and unemployment numbers are released on Friday, said Andre Cilliers, Currency Strategist at TreasuryONE in a note.
The rand often takes cues from global drivers such as US monetary policy in the absence of major local factors.
Meanwhile, South Africa's private sector activity contracted in December for the first time since August, with muted demand and rising inflationary pressure weighing on growth, a survey showed on Monday.
The S&P Global Purchasing Managers' Index, after signalling growth in each of the previous four months, dropped below the 50 neutral threshold to 49.9 in December, down from 50.9 in November, signalling a fractional decline in private sector business conditions.
The JSE All Share Index was trading marginally weaker Tuesday morning by 0.6%, with the JSE Top 40 down 0.88%.
Anchor Capital fund manager Peter Little said the domestic currency was one of the worst-performing major currency pairs against the US dollar in December, leaving it weaker against the greenback for the year (-2.6% year-on-year).
"Despite the tough end to the year, the rand found itself as the fourth-best-performing major currency against a strong US dollar in 2024 (behind the Malaysian ringgit, Thai baht, and British pound)," he said in a statement.
He said mining companies (-5% month-on-month) were the biggest culprit behind a negative performance by the JSE in December, and the only major JSE segment to deliver a negative return in 2023 (-11% year-on-year).
JSE-listed stocks with earnings geared mainly to the local economy had a marginally positive December (+0.25% month-on-month), ending a very strong year for that cohort (+21% year-on-year).
Platinum miners fared poorly (-12% month-on-month and -26% year-on-year) in the face of weak metal prices.