Rand steady above R12/$ as markets focus on geopolitics | Fin24

Rand steady above R12/$ as markets focus on geopolitics

Apr 13 2018 14:11
Jan Cronje

Cape Town - The rand held fairly steady on Friday as the focus of global markets remained on geopolitical events, from the Trump/China trade tariff dispute to the situations in Syria and North Korea. 

"Geopolitics remains the core focus for the USD/ZAR pair," said Bianca Botes, corporate treasury manager at Peregrine Treasury Solutions. 

"The current global market resembles a playground filled with boys playing 'mine is bigger than yours', with Donald Trump being the lead instigator," she said. 

The local currency opened at R12.06 to the dollar and was trading 0.09% firmer at R12.05/$ at 14:04.

"This week we saw the US engage in yet another conflict as Trump threatened to launch missiles in Syria following chemical attacks in that country. This now brings to three the total stand-offs, including the trade wars saga and the North Korea conflict."

The rand was trading under R12/$ at various points towards the end of last month, even at one stage threatening to break the R11.50/$ level.  

"This week we saw the rand breach the psychological R12.00/$ level with relative ease, following some rekindled fears about the trading dynamic between the US and other countries and more specifically China.

"President Xi, however, insists that China will continue to support global trade and will aim to create a foreign investment haven."

Wichard Cilliers, director and head of dealing at TreasuryONE, said little new economic data is expected to be released on Friday to influence the rand. 

"The range within which the rand has traded all week is likely to hold once more. There is quite simply nothing on the cards for today that is likely to generate a major market move, and the R11.90/$ to R12.15/$ range is therefore expected to hold." 

NKC African Economics likewise put its daily expected range at between R11.90/$ and R12.15/$.

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