Rand set for positive week despite global risk aversion
The rand was boosted by local political developments but sentiment remains subdued amid growing US-China trade tension
The rand was slightly firmer on Friday afternoon, set to close higher after a volatile week, amid a host of global and local developments. The local currency pushed past R14.50/$ this week as a result of risk aversion in global markets, primarily driven by prolonged US-China trade war. However, US President Donald Trump said on Thursday that if the US and China were to reach a trade deal, Chinese telecom giant Huawei would be likely to be included in the agreement. This follows reports that the US could impose Huawei-like sanctions on Chinese video surveillance company Hikvision. Efficient Group economist Dawie Roodt said that if the trade war continued, investors would run to where they felt safe — US dollars. “In the short term, the trade war is likely to be dollar positive but rand negative,” he said. China may possibly use its sizable holdings of US government bonds to retaliate, with China selling $20bn worth of treasuries earlier in the week. “If they try to sell US bonds beca...
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