You are currently viewing our desktop site, do you want to visit our Mobile web app instead?
 Registered users can save articles to their personal articles list. Login here or sign up here

Rand firmer as trade deal optimism eases growth shock

US President Donald Trump strikes a positive tone with China, lifting rand.

South Africa’s rand clawed back some lost ground on Wednesday with renewed optimism that China and the United States would strike a trade deal outweighing a surprise third-quarter contraction in the local economy.

US President Donald Trump said on Wednesday trade talks with China were going “very well”, striking a more positive tone than on Tuesday when he said a deal might have to wait until after the 2020 US presidential election.

At 1520 GMT, the rand was 0.34% firmer at 14.58 per dollar. It had slipped to a session low of 14.69 on Tuesday as the 0.6% contraction to gross domestic product (GDP) snapped the currency’s four-session winning streak.

A Reuters poll of analysts had forecast a marginal 0.1% quarter-on-quarter expansion.

A broad slowdown in Africa’s most advanced economy, led by mining, manufacturing and agriculture, has reignited fears of credit downgrades, spooking investors that have been lured in by the currency’s high yield.

Bonds were firmer on Wednesday, with the yield on the benchmark 2026 debt down 5.5 basis points at 8.43%.

On the bourse, stocks rose alongside emerging market shares after a report suggesting some progress in Sino-US trade talks helped offset concerns about further delays to progress in curtailing their trade war.

The benchmark JSE Top-40 Index was up 1.06% to 48 809.33 points, while the broader All-Share Index rose 0.82% to 54 933.21 points.

Financial services company Discovery and grocers Shoprite were at the top of the blue-chip index with Discovery gaining 4.03% to R113.52 while Shoprite rose 3.46% to R131.79.

Telecommunications groups Vodacom and MTN made modest gains after MTN announced that it would “vigorously” oppose recommendations of the Competition Commission after the regulator instructed the two companies to lower data prices.

Read: MTN to oppose regulator’s recommendations on data costs

Vodacom rose by 1.31% while MTN was up 0.95%.

Preventing further gains were gold miners Sibanye and AngloGold Ashanti, which declined off the back of weaker gold prices. Sibanye was down 2.71% while rival AngloGold dipped 2.69%. 

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





Follow us:

Search Articles:Advanced Search
Click a Company: