Rand firmer, despite worry about US-China trade truce
Local focus is on third-quarter GDP, with the rand extending Monday’s gains even as the trade truce relief rally runs out of steam
Pressure on the dollar helped lift the rand on Tuesday morning, even as global equity markets came under pressure from resurfacing doubts as to the future of US-China trade relations.
Risk-assets had staged a sizable relief rally on Monday, as investors cheered a 90-day ceasefire between the world’s two largest economies. Some compromises appear to have been made, although significant outstanding issues remain, such as forced technology transfers and intellectual property theft.
“The initial relief rally was never going to last, investors need more detail now in order for that risk-on sentiment to survive,” said London Capital Group analysts.
At 9.30am the rand was 0.52% stronger against the dollar at R13.6224, 0.24% against the euro at R15.5113 and 0.4% against the pound at R17.3565. The euro was 0.27% up at $1.1386.
The bid on the benchmark R186 government 10-year note was last seen at 8.89% from 8.9%.
Local focus is on third-quarter GDP numbers at 11.30am, which will answer weeks of speculation as to whether SA has exited its technical recession — defined as two consecutive quarters of contractions.
The Trading Economics consensus is that SA’s economy grew 0.5% in the third quarter on an annualised basis.