The local currency had been the best performing among emerging-market currencies in the past five days
14 October 2019 - 10:46
byOdwa Mjo
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
The rand was weaker on Monday morning, shedding gains after ending Friday at a three-week high, as investors continue to digest reports from the US-China trade talks.
The local currency has been the best-performing among emerging-market currencies over the past five sessions, gaining almost 2% on Friday bolstered by improved market sentiment as the US and China agreed on a “phase-one” deal. But it had pared gains by Monday morning, weakening to R14.85/$ in intraday trade after strengthening to R14.70/$ during Friday's session.
“Given the voracity of the move [in the rand] on Friday I would expect some sort of retracement this morning,” Standard Bank currency trader Warrick Butler said.
As part of the deal, the US has agreed to halt a tariff hike on $250bn worth of Chinese goods, and China will purchase more US agricultural products. The protracted trade war has contributed to investor fears that the global economy is slowing down, with some analysts sceptical that the US and China will soon a reach a complete trade deal.
“While such optimism may lend risk assets further support over the coming days, it is still too early to conclude that a new bull run will occur,” FXTM market strategist Hussein Sayed said.
“There is every chance that the trade wars is not done and dusted, if anything we all know how fickle [US President Donald] Trump can be and even through verbal agreements have been made, nothing has been signed yet,” Butler said.
At 9.55am, the rand weakened 0.41% to R14.8532/$, 0.27% to R16.3652/€ and was flat at R18.6771/£. The euro weakened 0.13% to $1.1018.
Both gold and platinum were flat at $1,489.72/oz and $891.57/oz, respectively. Brent crude lost 1.65% to $59.66 a barrel.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Rand’s winning streak peters out
The local currency had been the best performing among emerging-market currencies in the past five days
The rand was weaker on Monday morning, shedding gains after ending Friday at a three-week high, as investors continue to digest reports from the US-China trade talks.
The local currency has been the best-performing among emerging-market currencies over the past five sessions, gaining almost 2% on Friday bolstered by improved market sentiment as the US and China agreed on a “phase-one” deal. But it had pared gains by Monday morning, weakening to R14.85/$ in intraday trade after strengthening to R14.70/$ during Friday's session.
“Given the voracity of the move [in the rand] on Friday I would expect some sort of retracement this morning,” Standard Bank currency trader Warrick Butler said.
As part of the deal, the US has agreed to halt a tariff hike on $250bn worth of Chinese goods, and China will purchase more US agricultural products. The protracted trade war has contributed to investor fears that the global economy is slowing down, with some analysts sceptical that the US and China will soon a reach a complete trade deal.
“While such optimism may lend risk assets further support over the coming days, it is still too early to conclude that a new bull run will occur,” FXTM market strategist Hussein Sayed said.
“There is every chance that the trade wars is not done and dusted, if anything we all know how fickle [US President Donald] Trump can be and even through verbal agreements have been made, nothing has been signed yet,” Butler said.
At 9.55am, the rand weakened 0.41% to R14.8532/$, 0.27% to R16.3652/€ and was flat at R18.6771/£. The euro weakened 0.13% to $1.1018.
Both gold and platinum were flat at $1,489.72/oz and $891.57/oz, respectively. Brent crude lost 1.65% to $59.66 a barrel.
mjoo@businesslive.co.za
Stock markets in Asia strengthen after talks between US and China
Optimism about trade talks and uptick in dollar weigh gold down
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Most Read
Related Articles
Global oil edges down on lack of details over trade deal
Partial US-China trade deal could boost JSE on Monday
Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.