The South African rand kicked off Wednesday on a firm footing, dipping below the R16 to the US dollar mark as investors positioned themselves ahead of Finance Minister Enoch Godongwana’s National Budget Speech.
At 8 am local time, the currency was trading at R15.92/$ , supported by expectations of credible deficit reduction, stabilising public debt, and continued reform. Positive sentiment has lifted the currency in recent days as markets anticipate a fiscally responsible budget .
Godongwana’s Challenge
The minister faces a delicate balancing act: reassuring markets with credible fiscal consolidation while addressing pressing social needs and supporting an economy that has shown signs of stabilisation but remains fragile.
Analysts will be watching for:
Asia’s Tech-Led Rally
On the international front, Asian markets surged to record highs, led by technology stocks. Seoul’s Kospi jumped past 6,000 points for the first time, driven by chip titans Samsung and SK hynix. The index has soared more than 40% this year, following a 76% rally in 2025 .
Tokyo piled on more than 1% to hit a new peak, with tech firms Advantest and Tokyo Electron among the best performers. Taipei gained ground on the strength of Taiwan Semiconductor Manufacturing Company (TSMC). Hong Kong, Shanghai, Sydney, and Wellington also traded higher .
The AI Factor
Investors continue to pile onto the artificial intelligence bandwagon, shifting focus from New York where concerns about elevated valuations and US political and economic uncertainty have grown .
However, Wall Street’s tech titans, including the Magnificent Seven, have struggled in 2026 to match the past two years’ eye-watering performance. Questions are being asked about the vast sums invested in AI and when returns will materialise. Fresh worries about tools that could hammer software firms have compounded the problems .
Nvidia in Focus
All eyes are now on the release of earnings from chip behemoth Nvidia later on Wednesday. Analysts say the results could have an outsized impact on markets, given Nvidia’s central role in the AI boom .
But Matt Weller at City Index warned: “Put simply, ‘meeting’ earnings expectations is unlikely to be enough to drive the stock higher, especially if conservative guidance reinforces some traders’ fears that demand for AI may be downshifting.”
US Tariffs and Iran
Markets are also watching President Donald Trump’s State of the Union address, which comes after his tariff policy was dealt a body blow by the Supreme Court on Friday . Trump is also considering strikes on Iran, adding geopolitical uncertainty to the mix .
The Local Outlook
For South Africa, the immediate focus remains on Godongwana’s speech. A credible budget could extend the rand’s recent strength and support broader market sentiment. A misstep, however, could quickly reverse the gains.
With the rand at R15.92, the starting line is favourable. The minister now has to deliver.
