JOHANNESBURG (Reuters) -South Africa’s rand was steady on Monday as traders eyed a possible trade deal between the world’s two biggest economies that would be expected to remove a major overhang on global growth prospects.
U.S. President Donald Trump said on Monday the United States and China were set to “come away with” a trade deal at an expected meeting in South Korea this week.
South Africa’s risk-sensitive assets often take cues from global drivers such as U.S. policy and economic data.
At 1408 GMT the rand traded at 17.2425 against the dollar, little changed from Friday’s close.
The local currency, bonds and stocks started the week firmer in early trade, boosted by investor optimism over South Africa’s removal from the global financial crime watch list, but they have since cooled as focus shifted to U.S.-China developments and major central bank meetings set for this week.
“The removal restores South Africa’s global financial credibility, easing cross-border business and boosting investor confidence,” said ETM Analytics in a research note.
Africa’s largest economy was added to the list in February 2023 after criticism of its systems to combat money laundering and terrorist financing.
On the Johannesburg Stock Exchange, the Top-40 index was down 1.5%, paring its recent gains.
South Africa’s benchmark 2035 government bond also weakened, as the yield rose 1 basis point to 8.895%.
Domestically focused traders will look to money supply, private sector credit data, trade and budget balance figures and producer inflation numbers this week, for clues on the health of Africa’s largest economy.
(Reporting by Sfundo Parakozov; Editing by Timothy Heritage)
