CAPE TOWN – The rand came under some pressure over the weekend as risk sentiment dissipated ahead of the G20 summit that took place over the weekend.
Bianca Botes, corporate treasury manager at Peregrine Treasury Solutions said while there wasn't much news from the summit relating to the local economy, a crucial event was the meeting between US President Donald Trump and Chinese President Xi Jinping.
“The two presidents agreed to a theoretical ceasefire in terms of increases in tariffs by the US from 10 percent to 25 percent. The trade-war truce is due to last 90 days, and is set to enable the two countries to renegotiate trade terms,” she said.
Botes noted that investors, who had been spooked by the trade wars, would certainly be relieved as the rand recovered to levels against the dollar in the low R13.70s on Monday morning pre-trade.
At 5pm the domestic currency was bid 16c firmer than Friday’s same time bid at R13.71 a dollar. Against the pound the rand was 26c stronger at R17.43 and to the euro the currency strengthened 16c to R15.54.
Dynamic Outcomes director and head market analyst James Paynter said the domestic currency had another good start to the week – and it is big week of events coming up that could provide significant volatility.
“We have a number of US, UK and EU events as well as the big South African one: the current account for the third quarter.
“On the US side, we are watching the non-farm payrolls at the end of the week, but also the trade balance and Federal Open Market Committee (FOMC) speeches earlier in the week,” said Paynter.
On the JSE stocks rallied significantly on Monday with the blue-chip Top40 index added 3.12 percent to 46 052.36 points, while the broader all share index inched up 2.79 percent to 52 079.22 points.
BUSINESS REPORT ONLINE