Rand enjoys some support as global political events unfold
Global markets remain under pressure due to the trade war between the US and China, with no sign that they will reach a deal soon
The rand was slightly firmer against major currencies as the markets keep a watchful eye on unfolding global political events.
Global markets remain under pressure due to the tension between the US and China, with the two economic superpowers showing no signs of reaching a deal soon.
Investors are closely watching US president Donald Trump’s visit to Japan. The four-day visit is an effort to strengthen the alliance between the two countries in the face of the US-China trade tension.
Trump expressed confidence in the trade negotiations between the US and Japan, saying he expects “big numbers” on trade after the Asian country’s elections in July.
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At 9.30am on Monday morning, the rand had firmed 0.11% to R14.3974/$, 0.33% to R16.1235/€ and 0.18% to R18.3346/£, following UK Prime Minister Theresa May’s resignation on Friday. The euro gained 0.1% to $1.1199.
The markets are closely monitoring the results from the EU parliamentary elections, which show that the pro-European majority may be victorious despite populist groups gaining momentum.
“The main issue is how the euro will react to the results and the main threat to the euro is how many seats populist parties will occupy. The results in countries such as Germany, Italy, France and the UK will be closely watched. A rise in populism would weigh the shared currency lower, while the opposite scenario could give it a boost.” TreasuryOne senior dealer Andre Botha said.
Gold was flat at $1,285.68/oz and platinum rose 0.18% to $803.
Brent crude fell 0.78% to $68.68 a barrel.
The benchmark R186 government bond had strengthened, with the yield dropping one basis point to 8.35%. Bond yields move inversely to bond prices.
On the domestic front, the appointment of cabinet ministers has been delayed to later this week. Investors will be focused on the size and the composition of the new cabinet.