Rand breaks three-day winning streak as investors await US-China trade news
Sentiment was boosted earlier this week after reports that the US may consider withdrawing some tariffs on Chinese imports
The rand pared gains on Wednesday morning, breaking its three day winning streak as investors await more direction in the US-China trade war.
The rand weakened as much as R14.82/$ in intra day trade on Wednesday after closing at R14.75/$ on Tuesday. The premium on options to sell the rand against the dollar over those to buy it over the next month, known as the delta-25 risk reversal, was at a 19-months low of 1.7%, according to Bloomberg data.
Sentiment was boosted earlier this week after reports that the US may consider withdrawing some tariffs on Chinese imports.
“All this euphoria will die out soon enough regardless of the market holding onto the hope of a China-US pact being signed with regards to trade,” said Standard Bank currency dealer Warrick Butler.
“Like I am sure we all suspect, the good news from that is priced in now, so the risk is that things go awry, and we know Trump is not on an even keel,” he said.
At 10.06am, the rand had weakened 0.23% to R14.7871/$, 0.28% to R16.3826/€ and 0.24% to R19.049/£. The euro was flat at $1.1078.
Gold was up 0.13% to $1,485.34/oz while platinum was down 0.31% to $923,57. Brent crude lost 0.75% to $62.46 a barrel.