Rand firms as trade-talk progress boosts risk assets
The rand firmed against the dollar in early session on Wednesday, supported by rising risk appetite globally on increasing hopes of a breakthrough in US-China trade talks.
JOHANNESBURG - The rand firmed against the dollar in early session on Wednesday, supported by rising risk appetite globally on increasing hopes of a breakthrough in US-China trade talks.
At 0630 GMT, the rand traded at R13.7200 per dollar, 0.33% firmer than its New York close of R13.7650 on Tuesday.
Risk appetite improved after US President Donald Trump said on Tuesday he could let the 1 March deadline for a trade agreement with China “slide for a little while,” but that he would prefer not to and expects to meet with Chinese President Xi Jinping to close the deal at some point.
“The dollar is finally taking a breather after continuously edging higher against all currencies over the past week, after President Trump alluded to a potential extension of the deadline for a trade agreement with China,” said Peregrine Treasury Solutions’ corporate treasury manager Bianca Botes.
“US CPI and real earnings data will set the tone for the dollar as we head into the US trading session this afternoon,” she added.
The rand is recovering from a nearly three-week low after sharp selloff on Monday when it was hit by a sudden escalation of controlled power cuts in South Africa.
Power utility Eskom said on Wednesday it would implement electricity cuts for a fourth straight day, as the struggling state-owned firm battles a shortage of capacity that threatens to derail government plans to lift the sluggish economy.
In fixed income, the yield on the benchmark government bond due in 2026 dipped 2 basis points to 8.77% in early trade.