Rand firmer as investors await more US-China trade talks
Peregrine Treasury Solutions Bianca Botes said the rand could trade at R15/$ or below ‘should risk sentiment improve’
The rand was stronger on Tuesday morning as investors anticipate some progress in the US-China trade war as the two countries begin negotiations on Thursday.
Emerging-market currencies were bolstered by hope that the US and China will make headway at their high-level negotiations this week. Risk assets have also benefited from expectations that the US Federal Reserve may move to ease monetary policy at their two remaining meetings in 2019, following weak economic data.
Lower interest rates in developed economies such as the US will provide additional room for the Reserve Bank to cut the interest rate, as SA's bonds will become relatively more attractive for investors searching for higher yielding assets.
Treasury partner at Peregrine Treasury Solutions Bianca Botes said the rand could trade at R15/$ or below “should risk sentiment improve and expectations of a fed rate cut towards the end of the month prevail,”
At 10.04am, the rand had firmed 0.15% to R15.1551/$, with the rand's one-week implied volatility the third highest among emerging-market currencies on Tuesday morning. It had strengthened 0.19% to R18.6168/£ while it was flat at R16.6424/€. The euro had firmed 0.1% to $1.0982.
Gold added 0.17% to $1,495.83/oz and platinum 0.51% to $881.35. Brent crude was up 0.36% to $58.58 a barrel.