The rand was stronger on Tuesday afternoon‚ benefiting from risk-on trade‚ as global markets cheered signs that the US and China would seek to resolve differences over trade amicably.
Chinese President Xi Jinping’s speech on Tuesday morning has been described as broadly conciliatory‚ with Xi pledging to open the Chinese economy and reduce import tariffs on automobiles.
Washington had recently announced proposals to impose tariffs on a range of China’s goods‚ accusing the latter of unfair trade practices‚ as well as intellectual property theft. This prompted China to announce counter-measures.
“Although trade tensions between China and the US still fester‚ President Xi’s attempt to de-escalate the situation was seen as positive by the market‚ but investor worries will no doubt persist until some sort of détente is reached‚” said BK Asset Management MD Boris Schlossberg.
The rand and the euro pared gains shortly after the release of US data on Tuesday. US producer price inflation (PPI) was slightly higher than expected‚ with focus now expected to turn to US consumer inflation data‚ expected on Wednesday.
At 3pm‚ the rand was at R12.0424 to the dollar from R12.0931‚ R14.8699 to the euro from R14.9004‚ and at R17.0543 to the pound from R17.0928. The euro was at $1.2348 from $1.2321.