Rand awaits Cabinet announcement, but ongoing US-China spat still key | Fin24

Rand awaits Cabinet announcement, but ongoing US-China spat still key

May 14 2019 10:19

The rand is expected to trade in a range between R14.15 to R14.45 ahead of the announcement of the country's new Cabinet, TreasuryONE said in a morning note to clients.

Reaction to the "tit-for-tat" trade war between China and the US is also impacting the local currency. 

By 09:52 on Tuesday, the rand was changing hands at R14.24 to the greenback, up 0.6% on the day. 

"China imposed retaliatory tariffs on $60 billion worth of US goods yesterday which initially added to the risk-off sentiment in markets, but US President Donald Trump’s statement that he expected the trade negotiations to be successful, calmed markets," said TreasuryONE. 

The Bloomberg dollar spot index - its value relative to a basket of six foreign currencies - was unchanged at 97.34 on Tuesday morning, while the Chinese Yuan recovered overnight.

US shares had a tough trading day on Monday. "Wall Street was sold off heavily [on Monday] with Tech stocks being particularly hard hit. The S&P lost 2.41%, the Nasdaq 3.41% and the DOW 2.38%. Asian stocks also closed down this morning with the Hang Seng down 1.58%," said TreasuryONE. "Gold rose on the news of China’s tariff increases and broke above the $1 300.00 level. The price has slipped to $1 299.45 this morning."

"The oil price initially rose [on Monday] on the tensions in the Middle East and news from Saudi Arabia that two of its oil tankers had been attacked but has settled back at $70.42 this morning."

Bianca Botes of Peregrine Treasury Solutions said the US-China "tit-for-tat trade war games" were once again shaking global markets. She predicted the day's trading range to move a notch weaker to R14.26 to R14.42 to the dollar.

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