Thu, 04 Jun 2020

The rand weakened against the dollar on Monday after reports that China stated it would only discuss certain topics with the US in talks around the ongoing trade war between the world's two largest economies.

By 13:00 the rand was trading at R15.13/$, down 0.5%. It earlier reached an intraday low of R15.18 to the greenback after opening at R15.05/$.

Wichard Cilliers of TreasuryONE said in a note to Fin24 that reports that China would not accept a broad trade deal with the Trump administration had placed the yuan under pressure in offshore trade, which has had a knock-on effect on other emerging market currencies. Talks between US and China are set to resume on Thursday.

Annabel Bishop of Investec said the rand could again strengthen in the run-up to the Federal Open Market Committee's upcoming meeting on October 30, if risk aversion subsides. The local currency ended last week at R15.03/$, in part due to expectations that the US will cut its interest rates.

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