South Africa’s rand weak­ens as trade wor­ries sour risk ap­petite

The Financial Daily - - NATIONAL -

JO­HAN­NES­BURG: South Africa's rand weak­ened against the dol­lar in early trade on Wed­nes­day as wor­ries that Wash­ing­ton and Bei­jing may not be able to clinch a sub­stan­tive trade deal dur­ing their tem­po­rary cease-fire weighed on risk ap­petite.

* At 0630 GMT, the rand traded at 13.8600 per dol­lar, 0.14 per­cent weaker than its New York close of 13.8400 on Tues­day.

* The wan­ing hopes of a swift res­o­lu­tion to the U.S.-China trade war over­shad­owed news of the South African economy snap­ping out of re­ces­sion in the third quar­ter and sur­pass­ing economists' ex­pec­ta­tions.

* U.S. Pres­i­dent Don­ald Trump threat­ened on Tues­day to place "ma­jor tar­iffs" on Chi­nese goods im­ported into the United States if his ad­min­is­tra­tion is un­able to reach an ef­fec­tive trade deal with Bei­jing.

* "The rand gave up most of its gains dur­ing the overnight trad­ing ses­sion, as trade war fears resur­faced and (Bri­tish Prime Min­is­ter) May's hu­mil­i­at­ing Brexit bat­tles swiftly over­shad­owed the pos­i­tive lo­cal events," Bianca Botes, trea­sury man­ager at Pere­grine Trea­sury So­lu­tions, said in a note.

* Bri­tish Prime Min­is­ter Theresa May suf­fered em­bar­rass­ing de­feats on Tues­day at the start of five days of de­bate over her plans to leave the Euro­pean Union that could de­ter­mine the fu­ture of Brexit and the fate of her gov­ern­ment.

* In fixed in­come, the yield on the bench­mark gov­ern­ment bond due in 2026 was up 9 ba­sis points to 9.01 per­cent.

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