South Africa's rand weak; focus on global cues ahead of US tariff deadline

The rand was down 0.38pc at 14.66, compared to a close of 14.6050 on Friday. The market is forecasting inflati
09 Dec, 2019
  • The rand was down 0.38pc at 14.66, compared to a close of 14.6050 on Friday.
  • The market is forecasting inflation to slow to 3.6pc year-on year-in November from 3.7pc in October.
  • The rand is positioned to be influenced by external drivers in the form of US-China trade developments.

At 0838 GMT, the rand was down 0.38pc at 14.66, compared to a close of 14.6050 on Friday.

The United States is set to impose a new round of trade tariffs on Chinese goods on Dec. 15, a plan which White House economic adviser Larry Kudlow said on Friday was still in place.

"A sense of caution and unease is likely to linger in the air as the December 15 tariff deadline looms," said Lukman Otunuga, Senior Research Analyst at FXTM in a note.

"Any signs of trade tensions resurfacing between the two largest economies in the world should spark risk aversion which is negative for emerging markets."

Dollar strength also weighed on the rand as the greenback held firm on Monday after data showed surprise strength in the US jobs market.

Locally, investors will take their cue from another data packed week that will reveal key updates on manufacturing and mining production, consumer prices and retail sales.

The market is forecasting inflation to slow to 3.6pc year-on year-in November from 3.7pc in October, according to a Refinitiv poll.

"However, the rand is positioned to be influenced by external drivers in the form of US-China trade developments, Federal Reserve policy meeting and the dollar's valuation," Otunuga said.

In the equities market, the Johannesburg All-Share Index rose 0.13pc to 55,378, while the Top-40 index climbed 0.14pc to 49,132.

Bonds were weak with the yield on the benchmark 10-year government issue up 1.5 basis points to 8.425pc.

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