South African Rand Gains Strength Amidst US Tariff Plans and Geopolitical Tensions

On March 3, the South African rand strengthened against a weaker dollar, trading at 18.6150, a 0.5% increase from its previous close. This appreciation occurred as markets processed the U.S.'s plan to impose tariffs on Mexico, Canada, and China, alongside reactions to U.S. President Donald Trump's interactions with Ukrainian President Volodymyr Zelenskiy. European leaders convened over the weekend to formulate a Ukraine peace plan for presentation to the United States, following the clash between Zelenskiy and Trump. President Trump indicated that tariffs on Mexico and Canada would be implemented on March 4, citing ongoing drug flow into the U.S., with China facing an additional 10% tariff on the same day. Meanwhile, a local purchasing managers' index (PMI) survey revealed a continued decline in business conditions for South African manufacturers in February. Domestic investors are also awaiting fourth-quarter gross domestic product figures to assess the health of South Africa's economy.