Rand stung by Trump’s land debate tweet
THE RAND was trounced yesterday by a tweet from US President Donald Trump about South Africa’s land debate that planted thoughts of possible sanctions against the country.
The currency weakened 1.7% after Trump said he asked Secretary of State Mike Pompeo “to closely study the South Africa land and farm seizures and expropriations”, according to Bloomberg.
TreasuryONE senior currency dealer André Botha said President Cyril Ramaphosa addressed some of the issues regarding the land reform in Parliament.
“Key among which is that he does not support nationalisation of land and that the process of redistribution will be done in an orderly fashion, with land owned by the state and municipalities that are not used or underutilised being earmarked for the redistribution,” Botha said. This was expected to alleviate some fears among investors and the rand to continue on its strengthening path during the session.
“Furthermore, the US Fed minutes did not indicate a desire from the Fed to hike rates quicker than their forward guidance suggests. This has nibbed some of the calls for higher rates faster in the bud,” said Botha.
At 5pm yesterday, the rand was widely unchanged against the dollar at R14.29.
Against the British pound, it was 11 cents stronger at R18.34 and to the euro, the currency eased 4c to R16.54.
The corporate treasury manager at Peregrine Treasury Solutions, Bianca Botes, said Ramaphosa’s announcement that the first step in the land redistribution would be for government to issue the land held by the state provided a welcome relief to the market, assisting the rand to trade stronger.
JSE stocks were unperturbed by all the “Trumponomics” drama with the blue-chip Top 40 index gaining 0.13% to 52 131.76 points, while the broader all share index inched up 0.14% to 58 204.72 points.
Leading gainers were Clicks, which jumped 5.49% to R196.80, followed by Curro, which increased 4.98% to R33.70.
South32 added 4.05% to R36.73, while RCL Foods was 3.8% higher at R17.49, and Discovery climbed 3.41% to R173.
Among the biggest losers were Exxaro, which fell 6% to R147, and African Rainbow Minerals, which slumped 4.2% to R123.75.