Rand strengthens but trade-war fears linger
The rand was firmer against major currencies on Tuesday morning, paring yesterday’s losses as the trade war between the US and China escalates.
On Monday, US President Donald Trump accused China of manipulating its currency after the yuan broke below the psychological seven to $1. The protracted spat escalated last week after Trump slapped a 10% tariff on $300bn worth of Chinese goods as of September 1 saying that Beijing did not fulfil its commitment to purchase US farm products.
“Looking at the latest developments, it is safe to say that a trade deal between the US and China seems like a faraway dream,” London Capital Group senior market analyst Ipek Ozkardeskaya said.
“One thing is sure, the falling yuan adds fuel to the fire in the White House. Donald Trump increases the pressure on the Federal Reserve (Fed) for lower interest rates.”
Trade war fears saw the rand test the R15/$ level on Monday, reaching two-month lows as investors shied away from riskier assets.
At 09.45am, the rand had strengthened 0.84% to R14.8018/$, 0.77% to R16.5949 and 0.53% to R18.0285/£. The euro was flat at $1.1211.
Gold had fallen 0.23% to $1,460.40/oz and platinum 0.29% to $855.07. Brent crude had gained 0.27% to $60.06 a barrel.
Source: businesslive.co.za