South African rand drifts in holiday-thinned trade

Source: Reuters.

At 0707 GMT, the rand traded at 18.5375 against the dollar, up about 0.1% on Monday's closing level.

"The smallest move can be exaggerated as investors head into the Christmas holiday period, where liquidity dries up. It is, therefore, difficult to read too much into the current trading behaviour of the rand," ETM Analytics said in a research note.

So far in 2024 the rand is down about 1% against the US currency after another volatile year in which it swung back and forth on shifts in global sentiment, geopolitics and May's national election.

The election saw the long-ruling African National Congress lose its parliamentary majority for the first time since the end of apartheid, pushing it into a broad coalition with the market-friendly Democratic Alliance among other political parties.

Investors and local businesses are hopeful that the coalition will lead to faster economic growth, but it is still too early to tell from the available economic data and challenges including fiscal pressures remain.

On the Johannesburg Stock Exchange (JSE), the Top-40 index was up 0.2% in early trade.

The benchmark 2030 government bond was slightly weaker in early deals, as the yield rose 2 basis points to 9.12%.

The JSE is closed for public holidays on Wednesday and Thursday.