After the United States and China agreed upon restarting their troubled trade talks and lifting the mood across emerging markets, rand has become stronger.
eNCA stated that at 0625 GMT, rand traded at 14.0500 against the dollar, which was around 0.2% than its previous close. Government bonds were also stronger because the harvest on the benchmark 2026 bond fell 3.5 basis points to 8.06 %.
China President Xi Jinping and United States President Donald Trump were in Japan on sidelines of Group of 20 summit. They agreed upon holding back new tariffs and China will buy more farm products.
“China is South Africa’s top trading partner and rand is used by investors as proxy for emerging market risk. However, the rand has moved on news on the US-China trade war”, said Jinping.
Warrick Butler from Standard Bank said clients that market were expecting South African Reserve Bank (SARB) to cut its leading rate by 25 basis point. This can happen at its monetary policy meeting in July.
“SARB cut is likely high and the rhetoric could and should also be rather devolish”, said Butler.
