JOHANNESBURG, Jan 7 (Reuters) – The South African rand was subdued in early Wednesday trade, pressured by a rebounding U.S. dollar and a contraction in December’s local Purchasing Managers’ Index, the sharpest drop in business activity since January 2025.<\/p>\n
At 0646 GMT, the rand traded at 16.38 against the dollar , about 0.2% weaker than its close on Tuesday.<\/p>\n
Sign up here.<\/a><\/p>\n The S&P PMI fell to 47.7<\/a> from 49.0 in November as demand waned and firms reduced purchases and inventories.<\/p>\n ETM Analytics said in a research note that despite the downturn, business confidence remained resilient, with optimism for 2026 fuelled by expectations of new projects, stronger sales and an improving economy.<\/p>\n “For now, the USD-ZAR is consolidating its recent retreat. Sentiment towards SA continues to run high, with the JSE rising to fresh record levels, and bond yields remaining subdued,” ETM Analytics said.<\/p>\n “The current market dynamics are supportive of the ZAR, which should ensure that the ZAR remains strong for some time to come,” it added.<\/p>\n The rand ended 2025 nearly 13% stronger<\/a> against the U.S. dollar, its biggest annual gain in 16 years as the greenback weakened broadly.<\/p>\n South Africa’s benchmark 2035 government bond was firm in early deals, as the yield fell 5 basis points to 8.215%.<\/p>\n Reporting by Anathi Madubela; Editing by Andrew Heavens<\/p>\n Our Standards: The Thomson Reuters Trust Principles., opens new tab<\/a><\/p>\n