The South African rand made a modest recovery on Friday following two days of declines, as market activity remained subdued during the holiday period. At 0730 GMT, the rand was trading at 18.66 to the US dollar, marking a 1.1% rebound from its previous close.
The currency had faced pressure earlier in the week, losing around 1% against the dollar over Wednesday and Thursday, which coincided with the Christmas Day and Boxing Day public holidays. These days typically see thinner trading volumes, contributing to heightened volatility in the foreign exchange market.
Analysts noted that the rand’s movement during the holiday season was not unusual, as it is often influenced by lower liquidity and a lack of major market-moving events. However, despite the recent volatility, some experts believe that the rand’s performance could be a sign of resilience as global markets prepare for the new year.
In local stock market news, the Johannesburg Stock Exchange’s Top-40 index (.JTOPI) showed little change, reflecting the cautious sentiment among investors. The benchmark 2030 government bond, however, saw slight improvement, with its yield falling by 1.5 basis points to 9.025%.
With many traders still on holiday, analysts expect a more robust return to market activity in the coming weeks. Despite the recent fluctuations, the rand’s performance in the final days of December will likely set the tone for South Africa’s currency outlook in early 2024.