Rand retreats in global risk-off trade

The rand traded weaker early on Thursday, continuing to suffer on global risk aversion linked to the trade wrangle between the United Stats and China and financial turmoil in Turkey.

At 0645 GMT the rand was 0.52% weaker at 14.43 per dollar compared to a close of 14.35 overnight in New York.

The rand has fallen alongside other emerging market currencies on concerns that a trade truce between Washington and Beijing will be derailed by the Nafta deal the US signed this week with Mexico and Canada.

Turkey’s ongoing crisis has also hurt sentiment, with the lira reeling after Moody’s downgraded the credit ratings of 20 of the country’s financial firms.

We see potential for the rand’s further depreciation … with the USD/ZAR possibly surpassing the 14.50 resistance level,” said analysts at Continuum.

Stocks were set to open lower at 0700 GMT, with the JSE securities exchange’s Top 40 Futures Index down 0.44%.

In fixed income, the yield on the benchmark government bond due in 2026 was flat at 8.94%.