Rand’s recovery fizzles out on US-China tensions

A recovery in the rand fizzled out early on Tuesday, as the global market mood deteriorated over an upcoming visit to Taiwan by US House of Representatives Speaker Nancy Pelosi.

China claims self-ruled Taiwan as its own and has warned of serious repercussions if Pelosi visits.

At 0630 GMT, the rand traded at R16.54 against the dollar, around 0.1% weaker than its previous close.

No major domestic economic data releases are due on Tuesday, so the rand may continue to take its cues from global drivers.

On Monday, it capitalised on dollar weakness linked to bets the Federal Reserve will slow the pace of its interest rates hikes.

The risk-sensitive rand is highly susceptible to shifts in global sentiment.

The South African government’s benchmark 2030 bond was slightly firmer in early deals, with the yield down 5 basis points at 10.430%.

Source: moneyweb.co.za