Rand firms slightly, traders await Sino-US trade talk developments
The rand firmed slightly in early trade on Monday, clinging on to the previous week’s gains, as cautious investors awaited developments in US-China trade talks, and the local central bank’s rates decision later in the week.
JOHANNESBURG - The rand firmed slightly in early trade on Monday, clinging on to the previous week’s gains, as cautious investors awaited developments in US-China trade talks and the local central bank’s rates decision later in the week.
At 0700 GMT, the rand was 0.11% stronger at R14.7090 per dollar compared with last week’s close of R14.7290.
Both developed and emerging currencies kicked-off the week trading in narrow ranges as markets continued to eye developments in talks between Washington and Beijing to end a trade dispute.
A report on Sunday from Chinese state news wire Xinhua said the two sides had “constructive talks” over the weekend, prompting some optimism but not enough to drive any big bets by currency traders.
South Africa’s central bank decides on lending rates for the last time in 2019, and the regulator is expected to keep rates unchanged at 6.5%.
Twenty-one of the 28 economists polled by Reuters in the previous week said the repo rate would remain unchanged at the 21 November meeting. The remaining seven said the monetary policy committee (MPC) would cut rates by 25 basis points.
South Africa’s relatively high rates, combined with benign consumer inflation, has shielded the rand from large selloffs despite a deteriorating fiscal and economic outlook, and is set to keep it below the R15.00-mark going into year-end.
Bonds were flat, with the yield on the benchmark 2026 government issue inching up 0.5 basis point to 8.385%.