The rand weakened with the market rally and stronger dollar (and higher interest rates) that followed the US election result. Since then the rand has recovered, as some of the Trump impact on interest rates in the US and the US dollar moderated in mid-December. On a trade weighted basis, the rand has gained about 7% from its weakened immediate post Trump level.
The rand has also outperformed a basket of 11 equally weighted leading emerging market (EM) currencies after the Trump surprise. This basket includes the Turkish lira and the Mexican peso, which have been noticeably weak for their own specific reasons, such as the Trump threat to Mexican exports to the US. The rand moreover had gained strength relative to other EM currencies before the Trump election, relative strength that has continued since, as represented by the rand/EM exchange rate ratio.
The rand moreover has also strengthened against the developed market currencies as well as the US dollar after the initial Trump trade. It has also enjoyed a degree of strength vs the Aussie dollar, which can be regarded as a commodity currency.
It may be concluded that the rand has enjoyed a degree of strength for SA specific reasons. It is hard not to conclude that the rand has benefited from the assumption that President Jacob Zuma has become less likely to intervene in economic policy making. Perhaps this is the hopeful message to be read from the behaviour of the rand.
Nah … SA politics, never the reason for currency moves. US Dollar flows are. Maybe they’re buying the stock market, risk on.