South Africa‘s rand was weaker in late afternoon trade Monday after the greenback firmed to a five-month high as worries about a US-China trade war eased.
The relief lifted sentiment on industrial metal mining companies, helping the benchmark stock index notch up modest gains.
At 15:04 GMT, the rand traded at 12.7800 versus the dollar, a 0.89% recovery from the year’s lows of 12.8950 earlier in the session.
The dollar hit a fresh five-month high on US Treasury Secretary Steven Mnuchin’s declaration the feared US-China trade war was “on hold” following their agreement to suspend the tariff threats.
The stronger dollar also weakened South African bonds, sending yields on the benchmark 2026 note 5 basis points higher to 8.67%.
“We see a steady decline in South African bonds which are being sold off at the moment, with people rushing back to US yields,” said Wichard Cilliers, currency dealer at TreasuryONE.
“It is all to do with the dollar and emerging markets under pressure. I don’t think it will have a long-term impact at this stage.”
On the bourse, the blue-chip JSE Top-40 index edged up 0.04% to 51,310 and the broader All-share index was 0.03% in the black at 57,821.
Boosted by higher prices for metals such as copper, which rose to a one-week high, mining heavyweights Anglo American and BHP Billiton both gained nearly 2%.