Rand steady as Brexit fears again shake the pound
The rand was steady on Tuesday morning, although it had registered some gains against the pound as investors continued to digest recent news regarding Brexit and the US-China trade war.
The pound had strengthened last week after the Conservative Party won a commanding victory in the UK elections, with that party’s parliamentary majority removing the threat of a hung parliament and a protracted Brexit process.
However, reports suggested on Tuesday that Prime Minister Boris Johnson is seeking to rule out any further extension of the post-Brexit transition period, which points to the possibility of further conflict between the UK and Brussels.
“It appears Johnson is swearing to make the annoying Brexit saga an open-ended book affair,” said AxiTrader chief Asia market strategist Stephen Innes.
“The headline sent shivers down the spines of those who believed that the prime minister would use his significant majority and shift to a more harmonious relationship with the EU.”
At 11.53am, the rand was little changed against major currencies at R14.3897/$, R16.0408/€, while it gained 1.07% to R18.9688/£. The euro was flat against the US dollar at $1.1147.
Global markets were mixed on Tuesday, with investors also digesting a recent partial trade deal between the US and China. Analysts have noted that there is a distinct lack of details regarding the deal, particularly on rolling back existing tariffs.
Source: businesslive.co.za