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Rand weakens on renewed China/US trade war fears

Aug 05 2019 12:03

The rand again weakened against the dollar on Monday morning, compounding losses from last week. 

The local currency opened trade at R14.74 to the greenback and was changing hands at R14.86/$ at 11:45, down 0.5%. Earlier it fell to a low of R14.94/$ before strengthening briefly. 

"There seems so be no end in sight for the rand's woes as it continues to weaken," said Bianca Botes of Peregrine Treasury Solutions in a note to clients. "The trade war remains the focus point for the time being."

Last week US president Donald Trump threatened to impose additional tariffs on $300bn worth of Chinese imports. This dealt a blow to emerging market currencies, including the rand, as risk sentiment diminished. 

Andre Botha of TreasuryONE said in a morning note that China appeared to be starting to play hardball with the US, which has sent the market towards safe-haven assets like gold and the Japanese yen.

"China ... let the yuan weaken to its weakest level in more than a decade and ... asked state-owned companies to suspend imports of US agricultural products," he said.

rand  |  markets  |  currencies


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