The rand weakened on Monday after a survey indicated that factory sentiment had declined in May, while rising oil prices affected risk appetite.
The rand was trading at 16.3151 against the dollar, down approximately 0.6% from its previous close.
According to the survey, South Africa’s factory sentiment eased in May due to a slowdown in activity and demand, although it remained in expansionary territory for the second consecutive month.
Oil prices surged by more than 3% following strikes between Iran and the U.S., and Israel’s decision to deploy troops further into Lebanon.
Since the Iran conflict began in late February, the rand has been heavily influenced by global market sentiment.
Data from Naamsa, South Africa’s automotive association, showed that new vehicle sales increased by 12.8% year-on-year in May, slightly down from the 13% annual rise recorded in April.
This growth was supported by consumer confidence, despite increasing global volatility and cost pressures.
“May’s sales performance suggests that the market continues to benefit from the momentum established earlier in the year, even as a more uncertain macroeconomic environment is testing the foundations of that recovery,” the association said.
On the Johannesburg Stock Exchange, the Top-40 index fell by about 1.1%. Additionally, South Africa’s benchmark 2035 government bond weakened, with its yield rising by 4 basis points to 8.425%.
On Tuesday, 2 June, the rand was trading at R16.28 to the dollar, R21.92 to the pound, and R18.95 to the euro. Gold is trading lower at $4,510.53 an ounce, while oil prices were at $94.21 a barrel.
5 important things happening in South Africa today
Serious allegations against SPAR: A BDO report revealed VAT fraud at Spar’s Bloed Street Tops store, leading to conflicts with a potential buyer. The buyer alleges that findings on the management of one store could point to a broader problem in the group. [Business Day]
Safety warning about Chinese cars: The Automobile Association (AA) has expressed concerns regarding the safety and quality of vehicles entering South Africa, particularly focusing on the influx of Chinese vehicles. [eNCA]
Official petrol price for June: On Wednesday, 3 June, petrol prices will increase by R1.43 per litre to between R27.16 and R28.06, while diesel will decrease by between R2.62 and R3.25 per litre to between R27.05 and R29.26 (wholesale). [BusinessTech]
Bad news for food prices: South African food producer Tiger Brands warned on Monday of targeted price hikes to mitigate the impact of supply-chain risks from geopolitical uncertainty, including the Iran war. [Newsday]
Eskom coal could hurt South African businesses: The EU’s Carbon Border Adjustment Mechanism (CBAM) began imposing financial liabilities on carbon-intensive imports on 1 January 2026. This impacts importers, not South African producers directly. It signals that carbon intensity will affect market access for South African exports, particularly if indirect emissions from electricity use are included in the future, impacting Eskom’s reliance on coal. [Daily Investor]
