Rand softer as US-Sino trade war deepens
The rand was slightly softer on Thursday morning, as markets continued to be preoccupied with the risks associated with rising economic tension between the US and China.
US President Donald Trump placed restrictions on Huawei and 70 of its associates from doing business with US firms on Wednesday, sparking a risk-off mood on Thursday.
The US-China conflict continues to determine market sentiment, despite efforts by Trump in recent days to reassure markets that a deal is still on the cards. Trump has also delayed tariffs on vehicles for the eurozone, providing some relief on Wednesday.
“Trump’s meddling is almost single-handedly driving the markets right now. It’s not so much Adam Smith’s invisible hand but a very visible hand of President Donald Trump,” said London Capital Group analyst Jasper Lawler.
At 8.30am the rand was 0.32% weaker at R14.2644/$, 0.36% softer at R15.9838/€ and 0.3% down at R18.3143/£. The euro was flat at $1.1205.
Local focus remains on post-election developments, with markets awaiting an announcement on policy and cabinet changes.
Late on Wednesday, ratings agency Moody’s Investors Service said it expected to see concrete changes in order for SA to hold onto its investment-grade credit status. Moody’s warned that SA’s credit profile will likely continue to deteriorate in the absence of effective policy changes in the context of weakening fiscal strength and low growth.
Source: businesslive.co.za
