Rand firms a little as US and China move to soothe markets
The rand was slightly firmer against major global currencies on Monday morning, although gains remained fragile, as risk assets considered the latest moves by the US and China ease concerns over an escalating trade war.
Chinese officials have said they wanted “peaceful dialogue” with the US, while US officials have also said they were keen to resume talks.
While there had been some tranquillising effect, a lack of a firm recovery suggested high levels of caution in the market, Vanguard Markets managing partner Stephen Innes said in a note. “Good news or bad, investors continue to wear trade war emotions on their sleeves.”
Developments on Friday had prompted a wave of sell-offs for risk assets, with China first saying it would impose retaliatory tariffs on US products from September 1. The US also upped the quantum of tariffs it intends to levy on China, with US President Donald Trump also “ordering” US companies to begin seeking supply arrangements in alternative countries.
At 9.42am on Monday the rand was 0.56% firmer at R15.2732/$, 0.8% up at R16.9843/€ and 0.58% stronger at R18.7274/£. The euro was 0.28% weaker at $1.1121.
News that the US and Japan were gearing up to sign a new trade deal in September also provided some support for markets, but the rand still looked vulnerable, TreasuryOne senior currency dealer Andre Botha said in a note.
Source: businesslive.co.za