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Cape Town - The rand opened at R12.03 to the dollar on Monday, with market analysts of the view that it will still take its cue from trade tensions between the US and China, the world's two largest economies.
At 09:51 it strengthened slightly to trade at R12.01/$.
“A lot of the rhetoric that was in evidence last week will rear its head again this week. The constant theme for the past couple of weeks has been ‘trade wars’, and it does not seem that this beast wants to go away,” said Andre Botha, a senior currency dealer at TreasuryONE, in a statement on Monday morning.
Botha said that, due to a relative lack of local economic data set to be released, the local currency would likely trade in a tight range on Monday and stay above the R12.00/$ level for the short term.
“[In] the week ahead we can expect range trading unless we have a definite change in the trade wars stalemate. Then the rand will get clear direction,” he said.
Bianca Botes, corporate treasury manager at Peregrine Treasury Solutions, said she expects the local currency to push above the R12.00/$ level.
“There is not much data expected [on Monday], but moving into the rest of the week we will focus on South African mining production, South African manufacturing production as well as the US inflation and employment figures.”
“Global markets are keeping a close eye on the dynamic between the US, China and North Korea. Both trade wars and a potential conflict with North Korea remain relevant to the subdued risk appetite we are witnessing.”
According to NKC African Economics, the expected range on Monday for the local currency is between R11.85/$ and R12.05/$.
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