The rand is proving surprisingly steady in a jittery world. The local currency firmed 0.3% to trade at R16.52 against the US dollar on Thursday, even as renewed air strikes between the United States and Iran kept global risk appetite firmly in check.
The greenback eased against a basket of currencies while oil prices jumped after Tehran declared the Strait of Hormuz — the world's most important oil chokepoint — closed following US strikes on Iran. The two countries traded attacks for a second successive day, with President Donald Trump vowing further strikes if Tehran does not agree to a peace deal.
Local markets shrug it off
South African assets took the geopolitical drama in their stride. On the JSE, the Top-40 index closed up 0.5%, while the benchmark 2035 government bond firmed, its yield dipping 3.5 basis points to 8.6%.
The rand, like other risk-sensitive emerging market currencies, has largely been at the mercy of global sentiment since the start of the conflict. But a flow of supportive local data is helping it hold its ground — including Thursday's news that South Africa recorded its largest current account surplus in more than four years, powered by gold exports.
Mining surges, factories stumble
Statistics South Africa added more grist to the mill, reporting that total mining output rose 8.2% year-on-year in April, accelerating sharply from 2.5% in March. Manufacturing was the fly in the ointment: production fell 2.9% year-on-year in April, reversing March's 1.5% gain, as factory sentiment continues to wobble in the face of elevated oil prices and global uncertainty.
For now, the rand's resilience reflects a rare alignment: strong commodity exports, firmer bonds and a softer dollar. Whether that holds depends largely on events thousands of kilometres away — and on how long the world's oil arteries stay blocked.
Compiled by Business Bagel from reporting by CNBC Africa (Reuters).
