Rand firms amid trade war optimism
The rand was firmer on Wednesday morning, thanks to a boost from the hope that the US and China may be close to a trade deal.
Reports on Tuesday suggested the two countries are close to a deal, offering the prospect of an end to a trade conflict widely seen to have slowed global economic growth.
This boosted risk assets, which have generally found favour this week amid positive economic data out of China.
“Whilst traders are starting to look for more solid evidence that a trade deal between the two powers is achievable within the coming months, there is also a sense that investors are looking for any positive rhetoric to sustain the current rally,” said London Capital Group head of research Jasper Lawler.
At 9.45am the rand was 0.68% firmer at R14.1197/$, 0.43% stronger at R15.8595/€ and 0.27% up at R18.6199/£. The euro 0.25% weaker at $1.1233.
The benchmark R186 government bond was bid at 8.515% from 8.495%, moving in the opposite direction of the rand, which it usually tracks.
Local bonds had pushed to a 10-month high on Tuesday, boosted by a well-received weekly government bond auction, as well as a release by Moody’s Investors Service affirming that SA’s credit-rating remained stable for the moment.
Source: businesslive.co.za