Rand little changed amid Trump’s trade crackdown
The rand was little changed against major currencies on Monday morning as the fear of a global economic recession lingers in the face of the US’s trade crackdown.
Reuters reported that US President Donald Trump has stripped India of its preferential trade access to the US market under the General System of Preferences, a programme that allows developing countries to export goods to the US duty-free. The Trump administration decided to go ahead with India’s suspension due to the US’s lack of access to the Indian market.
Last week, the US announced a 5% tariff on Mexican imports as of June 10, as an attempt to pressure Mexico to curb illegal immigration from the country into the US. Negotiations between the two countries are expected to take place this week. Trump’s recent trade sanctions follow the prolonged trade conflict between the US and China.
“Trump has now got Mexico and India in his tariff sights [this] has only reinforced the pessimistic outlook for global growth and it is only a matter of time before the recession debate hits the news wires. We have already seen a safe haven like gold ramping up above the $1,300 level on the back of the latest global growth concerns,” said Andre Botha, senior dealer at TreasuryOne.
At 9.31am, the rand was flat at R14,5863/$, R16.2918/€ and R18.4395/£. The euro was little changed at $1.1169/$.
The benchmark R186 government bond had strengthened, with its yield falling two basis points to 8.45%. Bond yields move inversely to bond prices.
Gold gained 0.62% to $1,313.34/oz and platinum 0.74% to $800.12.
Brent crude fell 0.91% to $61,12 a barrel.
On the local front, Absa manufacturing purchasing managers index figures and total new vehicle sales will be released later in the day.
Source: businesslive.co.za
