Rand recovers a little from overnight losses as trade jitters resurface

The rand was about 0.5% firmer against major global currencies on Tuesday morning, recovering a little from overnight losses.

Reports suggesting the White House is gearing up to impose further tariffs on China in November should trade talks fail in November rattled markets, with most emerging-market currencies ending the day negatively.

Any further negative news towards emerging markets could spark a resumed slide in the local currency, said TreasuryOne dealer Andre Botha.

“The rand still has the dark cloud of the rating agencies hovering above it and any news from them in the next couple of months could cause a lot of volatility in the rand,” said Botha.

Analysts expect that ratings agencies may move SA’s sovereign debt to a negative outlook from stable, after the medium-term budget policy statement last week. South African deficits are expected to rise quite sharply in the next three years, while the government has also pencilled in growth forecasts that are seen in some quarters as optimistic.

At 9.32am the rand was 0.34% firmer to the dollar at R14.6671, 0.4% stronger against the euro at R16.6689 and up 0.48% against the pound at R18.7426. The euro was at $1.1365 from $1.1373.

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