Markets WRAP: The rand closes at R14.76/$ | Fin24
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Markets WRAP: The rand closes at R14.76/$

2019-06-14 08:52

The day's range was between R14.78 and R14.88.

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Last Updated at 04:28
14 Jun 17:17

The rand closed at R14.76 to the greenback on Friday afternoon.

The day's range was between R14.78 and R14.88.

14 Jun 16:16

President Donald Trump said "it doesn’t matter" if Chinese President Xi Jinping agrees to meet with him later this month to restart negotiations over trade because the US is collecting billions of dollars in tariffs on goods from the country.

"If he shows up, good," Trump told Fox News on Friday. "If he doesn’t - in the meantime, we’re taking in billions of dollars a month." He added, "Eventually, they’re going to make a deal, because they’re going to have to. Look, they’re paying hundreds of billions of dollars."

Trump has repeatedly threatened to raise tariffs if Xi doesn’t meet with him at the G-20 leaders’ meeting June 28-29 in Osaka, Japan. Trump said on Wednesday that he had no deadline for China to return to trade talks.

Talks with Beijing broke off last month after the US accused China’s leaders of reneging on provisions of a tentative agreement. Trump raised tariffs on about $200 billion of Chinese imports to 25%, and said he would expand the tariffs to cover another $325 billion in goods - substantially everything the country exports to the US - unless Chinese leaders reverse course.

Trump repeated his claim that Chinese exporters bear the burden of the tariffs, refuting the consensus of economists that the costs are largely born by US consumers in the form of higher prices."They subsidise their industry, so our people are not paying," Trump said on Fox. "There’s this big thing about tariffs, 'Oh, our people pay.' It’s a lot of nonsense. You know what happens, really? Companies move back.”

Trump also again accused China of manipulating the value of its currency, the renminbi, to cushion the impact of US tariffs. "Look, they’re paying hundreds of billions of dollars, I have 25% on $250 billion, and they subsidise it," Trump said. "They’re manipulating their currency in order to pay for it, they’re manipulating their currency lower, eventually that’s going to hurt them very badly and they’re also giving money to these companies." China made moves to strengthen its currency this week, and during Trump’s presidency the US Treasury Department has repeatedly refrained from officially accusing China of manipulating the value of the renminbi.

While the US has complained for years that China keeps its currency artificially weak through intervention in foreign-exchange markets, the central bank in recent days has acted to underpin the yuan. The People’s Bank of China set its daily reference rate for the currency at higher than market watchers expected for a 10th straight day on Wednesday, the longest run since September. - Bloomberg

14 Jun 09:22

The rand was even in early trade on Friday, opening at R14.86/$ and trading 0.12% stronger at R14.84/$ at 09:00. 

With no major SA economic data set for release on Friday, analysts expect the currency to again react to international events. 

NKC African Economics, in a morning note to clients, said these include uncertainty regarding the outlook for global trade and an apparent attack on oil tankers in the Gulf of Oman. 

According to Andre Botha of TreasuryONE, markets are focusing on the upcoming US Federal Reserve Bank's FOMC meeting to see whether the first of two anticipated rate cuts will happen.

14 Jun 08:52

Stocks mixed in Asia as yields grind down; gold up

Adam Haigh, Bloomberg

Stocks in Asia were mixed Friday and a global bond rally extended amid ongoing concern that trade frictions may jeopardize global economic growth and bets that interest rates will fall.

Oil remained strong following an escalation in Middle East tensions. Hong Kong and Korean shares fell, while Japan’s Topix index edged up and S&P 500 futures were little changed.

US stocks climbed Thursday to a five-week high. A surprise increase in US jobless claims supported the idea the Federal Reserve may cut rates, with the yield on 10-year Treasuries falling. They were at 2.07% Friday.

Australian yields plumbed fresh all-time lows. The dollar was flat, remaining in a tight range.

With heightened US-China trade tensions threatening to weaken already fragile global economic growth and geo-political concerns ratcheting up in the Middle East, equity investors are banking on more support from central banks.

The odds of the Fed shocking markets next week and lowering the fed funds rate target are higher than many expect, according to BMO strategists. Chinese data for May due Friday will show how the economy is coping with higher US tariffs.

“What’s important to remember right now is that there aren’t a whole lot of upside catalysts,” Randy Frederick, vice president for trading and derivatives at Charles Schwab & Co., told Bloomberg TV. “Markets are waiting now for what the Fed is going to say at the meeting and that’s coming next week.”

Elsewhere, oil producers were buoyed by Thursday’s surge in crude prices. Two tankers were damaged in suspected attacks near the Persian Gulf. The US blamed Iran.

Meantime, New Zealand’s dollar declined after weak manufacturing data fueled concerns for economic growth. The Aussie weakened with bond yields amid calls from strategists for looser monetary policy.

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