Rand recovers as US-China trade squabble slows dollar surge

South Africa’s rand gained early on Friday after three straight sessions of falls, as the dollar’s recent rally was halted by resurfacing trade tensions between the United States and China.

At 0620 GMT the rand was 0.31% firmer at 14.61 per dollar from a close of 14.66 overnight, pausing a slide that has seen the currency shed close to 4% as a more hawkish than expected tone struck the US central bank hit emerging markets.

US President Donald Trump broke a truce in the Sino-US trade war, saying he would impose an additional 10% tariff on $300 billion worth of Chinese imports on September 1 after US negotiators returned from trade talks in Shanghai.

That pushed the dollar back from a climb to a two-year peak, opening bids for safe haven and emerging market currencies, as well as sparking some profit-taking from long dollar investors after the rand tumbled through the 14.60 technical support mark.

Bonds were weaker, with the yield on the benchmark 10-year government issue rising 2.5 basis points to 8.4%.