JOHANNESBURG - South Africa’s rand opened firmer on Tuesday as the greenback dipped slightly with some traders opting for short-dollar positions as the scandal around President Donald Trump momentarily eclipsing fears over a U.S.-China trade war.
At 07:40am the rand was 0.21% firmer at 11.8375 per dollar compared to an overnight close of 11.8200 in low volume trade over the Easter weekend that saw most global markets closed.
Technical and momentum indicators suggested the rand was slightly oversold in the past few sessions and would move firmer toward a resistance level at 11.80, paving the way for further gains later in the week.
The rand lost more than 2 percent in value against the dollar in the previous week as the trade tiff between the world’s two largest economies escalated. China on Tuesday imposed extra tariffs on 128 U.S. products in response to U.S. tariffs on imports of aluminium and steel.
“The news this weekend across the globe revolved around Trump’s issues with regards to one Stormy Daniels more than the effect of the recent trade tariffs which goes to show how quiet this weekend was,” said chief trader at Standard Bank Warrick Butler.
The trade fears have dampened global risk appetite, but the rand remains an EM favourite following a ratings reprieve by Moody’s and data suggesting the continent’s most industrialised was on track for faster growth.
Local data releases include new vehicles sales data for March and the Absa Purchasing Managers’ Index.
The yield for the benchmark government bond was flat at 7.985 percent. The JSE Top-40 index was 0.3 percent lower at 48,638, tracking declines in major overseas markets.