German Bank: The impact of South Africa's budget on the Rand could be mixed.

Volkmar Baur of Deutsche Bank said in a report that the South African budget announcement at 12:00 GMT could have a mixed impact on the Rand. He stated that if the budget is disappointing, the Rand could weaken, as its strong performance since mid-2023 has been partly driven by market optimism about ongoing significant reforms. On the other hand, he mentioned that the risk reversal indicator in the options market suggests that investors have already positioned themselves for the possibility of a disappointing budget, with hedges against the risk of the Rand weakening at their highest level since 2023. "Therefore, if the Finance Minister presents a credible plan for spending cuts today, the Rand's appreciation could enter a new phase." According to London Stock Exchange Group data, the US dollar fell 0.3% to a one-week low of 15.8771 Rand.