Rand breaks through R15/$ on trade optimism
The rand burst through R15/$ on Friday morning, while the local currency looks set for its second week of gains as hope that the US and China will make progress in trade negotiations boosted sentiment.
The local currency, which has been battered by the protracted US-China trade war alongside its emerging-market peers, strengthened to R14.96/$ in intraday trade for the first time in almost two weeks.
Renewed optimism that the US and China will soon reach a trade truce lifted market sentiment this week as officials from the US and China began high level talks in Washington on Thursday.
Appetite for riskier assets was bolstered by US President Donald Trump’s tweet on Thursday that he would meet Chinese vice-premier Liu He on Friday. This follows conflicting headlines this week that added to investor concerns that the trade war could escalate.
“Things are looking up, not least because it’s Friday, but the general rhetoric permeating across the markets seems to be a positive one. The anxiety that paralysed participants earlier in the week is slowly dissolving as US and Chinese officials come together for the second day of trade discussions,” said RMB analyst Nema Ramkhelawan-Bhana.
“We can only assume that negotiators are making headway if they’re willing to engage for a second day, bearing out @realDonaldTrump’s assessment that ‘things are going very well’. Despite his lack of mastery with words, Trump’s opinions tend to steer financial market sentiment,” Ramkhelawan-Bhana said.
At 9.30am, the rand firmed 0.43% to R14,9914/$, the second best performing among emerging-market currencies. It had strengthened 0.35% to R16.5089/€ and 0.24% to R18.6816/£. The euro was flat at $1.1012.
Gold was up 0.48% to $1,500/oz and platinum 0.48% to $902.97. Brent crude added 1.24% to $60.26 a barrel.
Source: businesslive.co.za
