. Picture: REUTERS
. Picture: REUTERS

The rand was weaker on Monday morning, failing to hold on to gains that saw it nearly reach the R15/$ mark in earlier trade, while investors await high-level talks between the US and China this week.

The rand's one-week implied volatility was the second-highest among emerging-market currencies on Monday. The currency strengthened to as much as R15.02/$ in intraday trade, a level it has not reached since breaking through the R15/$ mark more than a week ago. It had pared gains by 10am on Monday morning. 

Markets are shifting their focus to the US-China trade war, which has placed much pressure on risk assets in the past few months. The two economic superpowers will resume high-level, talks later this week with some analysts less optimistic that the two countries will soon reach a complete deal.

“There is a lot riding on the outcome of this week’s tête-à-tête between the US and China. Although it is possibly less about exacting an actual trade deal and more about furthering Trump’s campaign for re-election,” RMB analyst Nema Ramkhelawan-Bhana said.

“Perhaps politicking will be put aside in the interest of global stability. Or perhaps not. The opportunity could be wasted, leaving Twitter alight with Trump’s 280-character critiques  — and markets less assured of a soft landing,” Ramkhelawan-Bhana said.

Locally, gross reserves rose to a record high in September to $54.86bn from $49.95bn in August, data from the SA Reserve Bank showed on Monday.  

At 10.08am, the rand weakened 0.13% to R15.097/$, breaking its three-day winning streak. It had weakened 0.11% to R18.5831/£ while it was little changed at R16.5655/€. The euro was flat at $1.0972.

Gold was down 0.1% to $1,503.18 and platinum 0.48% to $876.21. Brent crude lost 0.15% to $58.39 a barrel.

mjoo@businesslive.co.za