Rand cheers US-China trade detente
US President Donald Trump’s announcement that a deadline for new tariffs will be extended has boosted sentiment
The rand was firmer against major global currencies on Monday morning, boosted by improved prospects of a trade deal between the US and China.
US President Donald Trump tweeted that US and Chinese negotiators had made “substantial progress” on issues, including intellectual property protection, technology transfer and agriculture.
Trump said a meeting with Chinese President Xi Jinping would take place soon, and a Friday deadline for a trade deal would be allowed to pass without the US levying further tariffs on Chinese imports.
At 9.52am the rand was 0.61% stronger at R13.8884/$, 0.47% firmer at R15.7724/€ and 0.62% up at R18.1541/£. The euro was 0.15% stronger at $1.1356.
The extension of the trade deadline was not exactly a surprise to the market, but was a positive development, said London Capital Group analyst Jasper Lawler. Traders are acutely aware that negotiations may be harder at this stage.
Local events are taking a back seat this week, although producer inflation data, as measured by the annual change in the producer price index (PPI), is due on Wednesday. Further details on plans to recapitalise and restructure ailing state-owned enterprises (SOEs) are also on traders’ radars.