Markets WRAP: Rand closes at R14.35/$

The rand closed at R14.35 to the greenback on Wednesday afternoon.

The day's range was between R14.24 to R14.37.

Bitcoin goes parabolic as bubble-like gains come roaring back

Joanna Ossinger

Bitcoin’s furious run is starting to look more and more like it did at the height of crypto-mania two years ago.

The virtual currency surged as much as 14% on Wednesday, topping $12 900 for the first time since January 2018, and bringing its gain since early April to more than 200%. Its relative strength index, a gauge of momentum, is now within a hair’s breadth of the level when the cryptocurrency peaked around $19 500 in 2017.

Accelerating gains have raised the stakes for traders as they try to gauge whether this month’s rally has more staying power than the bubble that ended with a $700 billion crypto wipeout in 2018.

While bulls have cheered signs of growing interest in virtual currencies from major companies like Facebook Inc. and JPMorgan Chase & Co., sceptics say it’s unclear how those initiatives will ultimately benefit Bitcoin and its peers.

A break above the $12,720 level “will allow for a complete retracement of the 2018 bear market,” according to Macro Risk Advisors founder Dean Curnutt, though he noted in comments Tuesday that the rally was “turning more and more impulsive.”

The last time Bitcoin rose above $12 000 was in December 2017. It rallied further, eventually reaching as high as $19 511 later in the month, but the surge was followed by a precipitous fall that saw it drop below $6 000 by February.

All in all, in December 2017 and January 2018, Bitcoin spent about six weeks above $12 000.The cryptocurrency was up 11%, trading at $12 599.50 as of 4:48 p.m. in Hong Kong.

Rand steady as markets await US-China meeting at G20 

The rand was steady in early trade on Wednesday, changing hands at R14.32/$ at 11:05, after opening at R14.35 to the greenback. 

In a note to clients on Wednesday morning, Bianca Botes of Peregrine Treasury Solutions said the rand has remained largely range-bound between R14.25 and R14.40 to the dollar as markets wait for the start of a G20 summit in Japan. 

President Xi Jinping of China and US President Donald Trump are expected to meet at the summit to discuss trade issues. 

"[The] Parliamentary debate around SONA, albeit interesting, has no effect on the local currency market and is considered just noise, along with the money laundering investigation relating to the presidential campaign," she said. 

Stocks drop in Europe, Asia as US futures steady

Adam Haigh and Laura Curtis

Stocks fell in Europe and most of Asia while US index futures drifted as investors weighed prospects for Federal Reserve policy easing against the backdrop of threats to global growth and lingering trade tensions.

The Stoxx Europe 600 index dropped a fourth day, with carmakers among the biggest losers. Futures for the S&P 500 index nudged higher a day after US stocks’ largest decline this month following Fed Chairman Jerome Powell’s warning that downside risks to the economy have increased.

Ten-year Treasury yields climbed above 2%, oil rose to a four-week high on supply concerns, and gold gave up some recent gains. Shares slid in Japan and Australia, while benchmarks in Hong Kong and India edged higher.

Investor caution is returning ahead of the meeting between Presidents Donald Trump and Xi Jinping set for Saturday.

The US is willing to suspend the next round of tariffs on an additional $300 billion of Chinese imports while Beijing and Washington prepare to resume trade negotiations, people familiar with the plans said.

At the same time, no detailed trade deal is expected at the G-20 summit, a senior Trump administration official said. Markets are betting the Fed will produce deep cuts to rates this year, and Tuesday’s drop on Wall Street underscored investor desire for confirmation on that score.

“My biggest concern here is that people think higher tariffs, or the threat of higher tariffs, can be offset by the promise of lower rates,” David Kelly, chief global strategist at JPMorgan Asset Management, told Bloomberg TV. “That’s not going to work.”

Elsewhere, Bitcoin surged above $12 000 for the first time in more than a year, and briefly came within striking distance of the $13 000 mark. New Zealand’s dollar fluctuated after its central bank left rates unchanged.