The rand was trading at about R16.62 to the US dollar on Tuesday 3 November, the day before the municipal elections, as investors weighed the possible outcomes of the vote and a fresh trade blow from Washington.
The US has told Congress it intends to remove South Africa and Rwanda from the African Growth and Opportunity Act (AGOA) from 1 January 2027, and Pretoria disputes the reasons given. ETM Analytics said the effect on the market could be smaller than feared because the move had largely been anticipated.
What analysts are saying
Tertia Jacobs of Investec said: "Higher bond yields in major economies, particularly the US, remain a key headwind." Her colleague Awongiwe Booi said: "Previous local elections have generated constructive but short-lived market reactions."
On coalitions, Maarten Ackerman of CAM Asset Management said: "We have seen in the past how unstable coalitions can undermine service delivery and governance." Polling cited by analysts has put the ANC and the DA both close to 30% nationally, which points to coalitions in several municipalities.
What to watch next
The Reserve Bank announces its next interest rate decision on 19 November, and economists are split on whether it will raise rates again.
What we do not yet know
- How the rand will react once results are declared, which will not be clear until counting is under way.
- Where the rand traded on Wednesday, because we have not confirmed a closing level.
