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Rand skids on Donald Trump's 'get ready Russia' tweet

Apr 11 2018 14:08

Cape Town - The rand lost 8 cents within minutes after a tweet by US President Donald Trump warning Russia against countering missiles the US intends to fire at targets in Syria. 

The local unit weakened abruptly from R12.04/$ to R12.12/$ in early afternoon trade, after Trump's tweet hit emerging market currencies. By 14:40 it had strengthened to R12.056. 

"President Donald Trump has sent a stern warning to Russia in a tweet, this has sent emerging market currencies into a spin. [The] Russian ruble lost around 3% so far today, dragging the ZAR with it," said TreasuryONE in a snap note. 

The local currency was fairly steady in early trade on Wednesday morning, after opening at R12.02 to the greenback. 

At 13:25 it was trading at R12.11/$, down 0.6% on the day. 

Trump sent a tweet just before 13:00 saying that the US would be launching missiles at targets in Syria. His tweet was in reaction to reports that Russia had said it would shoot down any missiles launched by the US. 

The missiles are set to be fired in response to suspected chemical weapons attack.

As Bloomberg reported, this would be the second time in less than a year that Trump is weighing a military response to a gas attack.

*Update 1 on April 11 at 14:20. This article was updated to clarify that Trump warned Russia against countering proposed US missile strikes against targets in Syria. 

*Update 2 on April 11 at 14:40. This article was updated to reflect the rand's price. 

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