Rand firmer as good news stacks up
Positive local data came in the form of an improved PMI for November, while global risk assets cheered the trade truce between the US and China
The rand held onto its earlier gains on Monday afternoon, continuing to be lifted by a surge on risk-on trade after the US and China agreed to a truce in their ongoing trade war.
US President Donald Trump and Chinese Premier Xi Jinping’s agreement of a three-month halt to further trade actions has lifted markets, which were also digesting a surging oil price on Monday.
Brent crude rose over 5% on both the news of the trade truce, as well as ahead of a key meeting of oil-cartel Opec this week, which is widely expected to result in hefty production cuts.
The trade conflict has been one of a number of negative factors that has dragged oil lower over the last couple of months, and even now it is trading around 30% off its peak, said Oanda analyst Craig Erlam.
At 2pm the rand was 0.49% firmer against the dollar at R13.6724, 0.67% against the euro at R15.4931 and 0.85% against the pound at R17.3905. The euro was 0.17% weaker at $1.1333.
Earlier, local news was somewhat positive, with the Absa purchasing managers’ index (PMI) for November climbing to 49.5 index points in November, from a depressed reading of 42.4 in October.
Operating conditions for the manufacturing sector looked set, however, to remain challenging, said Investec economist Kamilla Kaplan.