Rand weaker as emerging markets knocked by trade war fears

The rand weakened on Tuesday as emerging market currencies lost ground with further deterioration in United States and China trade relations subduing demand for risk assets.

At 0650 GMT the rand was 0.32% softer at 15.10 per dollar compared to a close of 15.05 in New York.

The threat of Washington imposing heavier trade sanctions on Beijing intensified after US President Donald Trump said on Tuesday he would take a tougher stance with China on trade.

China on Wednesday slashed its forecast for 2018/19 soybean imports as farmers reduce their use of the bean in animal feed because of the Sino-US trade conflict, which will threaten Washington’s supplies of the oilseed to China.

The local market awaits the release of retail sales data at 1100 GMT for July, with the market expecting a 1.3% increase year on year from a 0.7% rise in June.

Government bonds were weaker, with the yield on the benchmark paper due in 2026 rising 3 basis points to 9.180%.