Rand firms as prospect of US-China trade deal buoys sentiment
Easing US-Iranian tension and expectations that a partial US-China trade deal will be signed next week are supporting emerging-market currencies
The rand was marginally firmer against major global currencies on Thursday morning, as US-Iran tension eased.
There has been relief in the market after US President Donald Trump and Iranian leaders signalled their willingness to end hostilities.
With the tension in the Middle East easing, investor attention returns to the pending US-China phase one trade deal.
In December, US President Donald Trump said the phase one trade deal would be signed on January 15 in Washington, with “high-level representatives of China” present. Trump also said he would travel to Beijing at some point to begin talks on the next phase.
On Thursday, China's commerce ministry confirmed that China’s vice-premier, Liu He, who is also head of the country’s negotiation team in China-US trade talks, would sign a phase one deal in Washington next week.
A spokesperson for China's commerce ministry told reporters at a regular briefing said that Liu will visit Washington, and that negotiating teams from both sides remain in close communication on particular details of the signing of the phase one trade deal.
The rand was positive despite a spate of negative local news, including a return of load-shedding on Thursday and the World Bank's cutting its growth forecast for SA in 2020 to 0.9%.
The improving global mood could see the rand testing R14.10/$ in the short term, said FXTM senior market analyst Lukman Otunuga in a note.
At 11.30am, the rand had strengthened against major currencies and was up 0.33% to R14.1294/$, 0.26% to R15.6987/€ and 0.39% to R18.4893/£.
Gold was down 0.58% to $1,546.62/oz while platinum was little changed at $954.58/oz. Brent crude was flat at $65.76 a barrel.
Would you like to comment on this article or view other readers' comments?
Register (it’s quick and free) or sign in now.
Please read our Comment Policy before commenting.