Rand weakens as tariff jitters take hold
The rand was slightly softer against major currencies on Monday morning, with the prospect of further trade tension weighing on sentiment.
Finance ministers and central bankers from the Group of 20 (G-20) meeting in Argentina at the weekend failed to make progress in resolving trade tensions. US Treasury Secretary Steve Mnuchin warned after the meeting that it was "definitely a realistic possibility" that the White House would impose an additional $500bn in tariffs against China, Dow Jones Newswires reported.
Locally, focus is on the forthcoming Brics (Brazil, Russia, India, China and SA) meeting, where it is widely expected that the bloc will reach some sort of agreement to jointly oppose protectionism.
Ahead of these risk factors, the rand is expected to be somewhat range-bound, having been boosted on Friday following criticism by US President Donald Trump of the US Federal Reserve’s rate increasing cycle.
The release of Eskom’s financial results on Monday could also provide the market with some direction, analysts said, coming as the state battles to rein in deficit spending, and keep the lights on.
"The markets are currently trading on the back foot as a result of the aforementioned headlines as well as various factors including local wage negotiations," said Nedbank Corporate and Investment Banking analysts.
At 9.30am the rand was at R13.4711 to the dollar from R13.4147, R15.8012 to the euro from R15.7328 and at R17.7117 to the pound from R17.6073. The euro was at $1.173 from $1.728.
Local bonds were slightly weaker in line with the rand, with the benchmark R186 10-year note bid at 8.75% from 8.715%, while the R207 was at 7.455% from 7.435%.