Rand weaker as US-China tension takes toll

JOHANNESBURG - The rand was weaker on Monday morning, leading emerging- market currencies lower as escalating US-China tension weighed on sentiment, while locally, investors wait to hear what was said at the ANC’s national executive committee (NEC) meeting.

Emerging-market currencies were knocked on Monday after reports that the US administration is considering restricting capital flows to China. The latest reports have fueled concern that the trade war may escalate even further.

Locally, investors are awaiting news from the NEC meeting, during which finance minister Tito Mboweni’s economic recovery plan is likely to have been discussed. The meeting was concluded on Sunday.

“I am not getting my hopes up. We haven’t seen anything from the governing party in the last five months so no point getting bullish about a weekend where half the NEC seems to be at loggerheads with the other half consistently — if the press is to be believed, that is,” Standard Bank currency trader Warrick Butler.

“Still, some good news around Eskom or the plan put forward by Mr Mboweni could help the rand out a touch today,” he said.

At 09.50am, the rand had weakened 0.48 percent to R15.1961/$, reaching its worst level in over three weeks in intraday trade. It was down 0.48 percent to R16.6244/€ and 0.56 percent to R18.7033/£. The euro was flat at $1.094.

Gold was down 0.42 percent to $1,490.48 and 0.19 percent to $930.16. Brent crude lost 1.83 percent to $60.76 a barrel. -