WATCH: Rand surges stronger after Beijing and Washington struck a partial trade agreement
JOHANNESBURG - The rand surged stronger after Beijing and Washington struck a partial trade agreement last week, pointing to a potential breakthrough in the 15-month trade war between the world’s two leading economies according to NKC Research.
Emerging market currencies in general reacted positively to the news. For both Presidents Trump and Xi, the interim deal comes at a time of growing political pressures and rising economic worries domestically. Closer to home, South Africa remains vulnerable to the downside scenario as a slowdown in China growth will be amplified by its position as risk proxy. We attach a 30 percent probability to a global recession in 2020. While there is no shortage of plausible shocks, developments such as a further escalation in US-China trade tensions alone may not be enough to trigger a recession. At the close of local trade, the rand quoted 1.48 percent stronger at R14.80/$, after trading in range of R14.77/$ - R15.05/$. Expected range today R14.60/$ - R14.90/$.
South African bourse
The JSE All Share (+0.84 percent) ended higher at the end of last week – in step with major international stock indices – buoyed by trade optimism. In the overall emerging market sphere, the MSCI Emerging Market Index (+1.51 percent) traded higher/lower.
Brent crude oil
The Brent oil price broke through $60pb on Friday, following news that an oil tanker owned by Iran came under attack in the Red Sea off Saudi Arabia's coast. At the close of local trade, benchmark Brent crude futures quoted 0.57 percent higher at $60.29pb. Crude prices remained steady near key levels during Asian trade this morning.
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