Rand to remain under pressure as US-China trade tensions take centre stage
The rand regained some ground against the dollar on Monday morning after weakening late last week, but is expected to remain under pressure as trade tensions between the US and China take centre stage.
The local currency was changing hands at 14.36/$ at 10:15 on Monday after opening at R14.41 to the greenback.
"The rand remains on the back foot as trade tensions between the US and both China and Iran remain in focus, driving demand for safe-haven assets," said Bianca Botes of Peregrine Treasury Solutions in a market update.
Commerzbank, in a morning note to clients, said the current 'Trump doctrine' of US foreign policy is clearly seen as dollar positive by the market.
This includes the "threat of imposing car tariffs, massive tariffs on imports from China, restrictions against individual foreign telecoms companies and military threats against Iran".
The dollar spot index – its value relative to a basket of six foreign currencies of its trading partners - was even on Monday morning.
Andre Botha, Senior Dealer at TreasuryONE, said in a morning note that the rand may firm depending on the make-up of Ramaphosa's Cabinet.
"Should the market be happy with his appointments we could see the rand slowly trudging back to the R14.00 level."