Registered users can save articles to their personal articles list. Login here or sign up here

Rand ends winning streak on trade war fears

Stock market dragged lower by commodity stocks due to global fall in precious metals.

South Africa’s rand retreated more than 1% on Wednesday as fears of a trade war between the United States and China hit global demand for emerging market currencies.

Stocks also weakened with commodity stocks taking the hardest knock.

At 15:42 GMT the rand was down 1.14% to 13.4825 per dollar, its weakest since Friday, snapping a six-session winning streak that propelled to its firmest in nearly a month.

US President Donald Trump said overnight Washington would impose further tariffs Chinese goods, dampening hopes for a descalation in the trade row investors fear will derail a global growth rebound.

Traders, already cautious this week, said they were taking small profits on the rand’s recent rally and positioning for a stronger greenback.

“This toing and froing between China and the US isn’t helping emerging markets. The rand hasn’t taken any local data into account over the last couple of weeks. It’s all about the dollar,” said trader at TreasuryOne Andre Botha.

The rand touched 13.2450 overnight, near a key technical resistance mark, but backtracked soon after with recent buyers now looking to sell beyond the 13.50 level.

Short-term momentum indicators also suggested the currency had strayed into overbought territory, exacerbating the selloff.

Bonds also weakened, with the yield on the benchmark bond due in 2026 rising 2 basis points to 8.74%.

South African stocks ended weaker on the day, led by resource shares as commodity prices fell.

On the bourse, the benchmark Top-40 index was down 1.45% to 51 044 points while the broader All-Share index lost 1.37% to 57 231 points.

Platinum fell 1.13% as trade war fears fuelled a sell-off that saw prices hit the lowest in a decade, below the cost of production for many mines in top producer South Africa.

Locally, the mining index was down 2.1%, as Anglo American Platinum closed down 1.10% to R366.20 and African Rainbow Minerals shed 3.06% to R115.80.

On the flipside South African retailer Steinhoff, was up 20.86% to R2.26 after it announced that it had begun a process with creditors for a “lock-up agreement”, which once completed could allow the restructuring of huge debts within three months. (Reporting by Mfuneko Toyana and Nomvelo Chalumbira Editing by Joe Brock)

Get access to Moneyweb's financial intelligence and support quality journalism for only
R63/month or R630/year.
Sign up here, cancel at any time.


To comment, you must be registered and logged in.


Don't have an account?
Sign up for FREE


Insider GOLD
ONLY R63pm

Moneyweb's premium subscription is a membership service which will give you access to a number of tools to take charge of your investments.
Or choose a yearly subscription at R630pa - SAVE R126

Get instant access to all our tools and content. Monthly subscription can be suspended at any time.



Follow us:

Search Articles:Advanced Search
Click a Company: