Rand slips as US-China trade war weighs on emerging markets
The rand was the third-biggest loser among emerging-market currencies, with only the Brazilian real and Argentinian peso doing worse
The rand was among the worst-performing emerging-market currencies against the dollar on Friday afternoon, dragged down by the persistence of US-China trade tension.
Escalating tension between the US and China continues to disrupt global markets as the two superpowers struggle to reach a trade deal. This week China announced a tariff increase on $60bn worth of US imports effective from June 1, while the US on Wednesday signed an executive order to blacklist Chinese telecoms giant Huawei from the US market.
The rand was the third-biggest loser among emerging-market currencies, with only the Brazilian real and Argentinian peso performing worse. By 2.30pm the rand was down 0.56% to R14.37/$, 0.56% to R16.0556/€ and 0.22% to R18.3272/£. The euro was flat at $1.1173.
The benchmark R186 government bond weakened, with the yield rising seven basis points to 8.5%.
London-based Oanda analyst Craig Erlam said upcoming political events on the domestic front will not be the main factor for the rand in the coming weeks. With it being one of the most volatile emerging-market currencies, it will probably be among the most vulnerable to episodes of risk aversion due to the US-China spat.
Gold was flat at $1,285.56/oz, while platinum was down 1.05% to $824.52. Brent crude was unchanged at $72.76 a barrel, as concerns over supply disruptions grow amid fears of conflict between the US and Iran over the latter’s nuclear programme.