Picture: REUTERS
Picture: REUTERS

The rand was weaker against major global currencies on Friday morning, in risk-off trade, as US-China trade war concerns continued to inject an air of gloom into the market.

US President Donald Trump said on Thursday he was unlikely to meet with Chinese President Xi Jinping before March 1, when a trade truce between the two countries expires.

This put pressure on risk assets, with the rand weakening to a one-week low against the dollar overnight, extending its losses on Friday morning.

This was despite President Cyril Ramaphosa announcing in the state of the nation address (Sona) on Thursday that embattled power utility Eskom may be split into three separate entities — providing distribution, generation and transmission, respectively.

Eskom’s financial issues are seen as a key risk factor for SA’s sovereign credit status, but Ramaphosa gave assurances that the government would sell nonstrategic assets before providing further bail-outs.

Although Ramaphosa addressed Eskom’s issues and corruption, implementation risk remains, and the state’s plans are likely to receive resistance from unions, said Sasfin Wealth fixed-income trader Alvin Chawasema.

At 9.46am the rand had fallen 0.27% to R13.6631/$, 0.25% to R15.4873/€ and 0.15% to R17.679/£. The euro was flat at $1.1335.