Picture: REUTERS
Picture: REUTERS

The rand was a little firmer against major global currencies on Wednesday morning, range-bound as markets wait for the next major development, a meeting between US President Donald Trump and Chinese President Xi Jinping this weekend.

The meeting on the sidelines of the Group of 20 (G20) summit is widely expected to clarify the next stage of the US-China trade war, either escalation or a move towards a new trading paradigm.

Range-bound trade in the rand is expected, though there are some local events of note on Wednesday. President Cyril Ramaphosa is due to respond to Tuesday’s parliamentary debate on his state of the nation address (Sona), which took place last week without major incident.

“Parliamentary debate around Sona, albeit interesting, has no effect on the local currency market and is considered just noise, along with the money-laundering investigation relating to the presidential campaign,” said Peregrine Treasury Solutions treasury partner Bianca Botes.

At 8.30am the rand was flat at R14.3419/$, and had weakened 0.22% to R18.1718/€ and 0.14% to R16.2914/£. The euro was flat at $1.136.

Risk assets were under a little pressure following US Federal Reserve chair Jerome Powell’s comments last night that there was a need to insulate the Fed from short-term political pressure.

Oanda analyst Craig Erlam said Powell’s speech did not have much effect, noting, however, that market expectations of a 50 basis-point cut at the Fed’s July meeting had halved.