Rand weakens as US-China trade agreement hopes dim
Concern is mounting that the US and China will not be able to bury the hatchet on trade, while disappointing Chinese data also hit sentiment
The rand was weaker against major global currencies on Monday afternoon, taking its cue from risk-off global sentiment, ahead of a busy week.
Comments by White House economic adviser Larry Kudlow that trade talks with China were not progressing dulled investor sentiment.
Weekend data showed growth in China’s service sector slipped to a 13-month low in October according to a private gauge, adding to the downbeat tone in Asian trading, reported Dow Jones Newswires.
The week is a busy one, with US midterm elections on Tuesday, and a US Federal Reserve interest-rate decision on Thursday.
There was some expectation that the Democrats in the US might wrest control of the House of Representatives from the Republicans, something that could point to legislative deadlock, said Rand Merchant Bank analyst Nema Ramkhelawan-Bhana.
Of lesser interest was the Fed meeting, as there was little chance of another interest-rate increase until December, but the Fed could always sway the market, she said.
At 2.32pm the rand was 0.75% weaker against the dollar at R14.3715, 0.6% against the euro at R16.3414 and 0.48% to sterling at R18.6689. The euro was 0.16% softer against the greenback at $1.1371.
At the same time the bid on the benchmark R186 government bond was at 9.19% from 9.175%.