JOHANNESBURG (Reuters) – The South African rand continued to fall on Tuesday after a turbulent start to the week as markets waited to see how the modern Government of National Unity (GNU) would approach economic reforms after forming a cabinet.

At 11:31 GMT, the rand was trading at 18.475 against the dollar, 0.6% weaker than its previous close. The dollar was up more than 0.1% against a basket of global currencies.

“Following the announcement of the GNU government, the market is now waiting for clear signals regarding the intention to implement economic reforms,” ETM Analytics said in a research note.

President Cyril Ramaphosa’s African National Congress (ANC) lost its parliamentary majority for the first time in 30 years in elections held on May 29 and formed a national unity government with former rivals to stay in power.

South African assets gave up some gains on Monday as initial market optimism faded a day after a modern Cabinet was formed, with former opposition leader John Steenhuisen taking over as agriculture minister.

The dollar’s strength also weakened the rand as markets turned their attention to the US presidential election in November.

“The driving force was the growing momentum of Donald Trump’s re-election campaign following President Biden’s lackluster debate performance last week and the Supreme Court’s ruling that Trump has broad immunity from prosecution, issued yesterday,” ETM Analytics added.

The US Federal Reserve’s Jerome Powell will deliver a speech on Tuesday, and markets will be closely watching for clues about the future path of interest rates in the world’s largest economy.

The risk-sensitive rand often draws information from global factors, such as US monetary policy and political events, as well as local factors.

On the Johannesburg Stock Exchange, the index of 40 largest companies was down 0.5%.

South Africa’s benchmark 2030 government bond was marginally stronger, with its yield falling 0.5 basis points to 9.95%.