Rand weaker as US-China trade war hog the spotlight
The rand was weaker this week as the market reacted to the US announcement that it would ease the ban on Chinese tech giant Huawei.
The US-China trade war continues to dominate global markets after Google suspended some of its business with Huawei, following it being blacklisted by the US last week. The US temporarily lifted the ban on the Chinese company on Tuesday morning, granting a 90-day licence for US companies to continue doing business with Huawei, Financial Times reported.
“The belief is that the licence alone will not make much of a difference on emerging markets as the stalling of the trade talks was about much more than one cellphone provider. With this in mind, there is still a great deal of uncertainty in the markets and this has been reflected in the market again this morning with the US dollar on the front foot, ” TreasuryOne senior dealer Andre Botha said.
Atlanta Federal Reserve president Raphael Bostic told CNBC on Monday that he does not see the US central bank cutting interest rates despite market expectations.
Investors this week will be keeping a watchful eye on the minutes of the US Federal open market committee meeting, due to be released on Wednesday.
At 10am the rand weakened by 0.56% to R14.4659, 0.47% to R16.1358/€ and 0.38% to R18.3696/£.
Gold fell 0.17% to $1275.51, platinum 0.16% to $813.04.
Brent crude was flat at $72 a barrel.
On the local front, StatsSA is set to release inflation figures for April on Wednesday, while the Reserve Bank will release its interest rate decision on Thursday.
The markets are also watching domestic political events this week as President Cyril Ramaphosa is expected to appoint his cabinet, with the expectation that he will choose ministers who will help him execute his promised economic reforms.