JOHANNESBURG: South Africa's rand firmed on Tuesday as slightly more optimistic comments from US and Chinese officials on trade brought some comfort to markets, while stocks fell.
At 1530 GMT, the rand traded at 14.2150 per dollar, 0.84pc firmer than its New York close on Monday.
The Chinese government's top diplomat said China and the United States have the "ability and wisdom" to reach a trade deal that is good for both. US President Donald Trump said he was optimistic about resolving the trade dispute.
Fears the United States and China are spiralling into a protracted trade dispute that could derail the global economy have rattled investors in recent weeks.
The rand weakened more than 1pc on Monday, shedding post-election gains, as the escalation in the US-China trade war dented emerging market currencies.
Despite the improvement in global market sentiment, the currency faces domestic economic risks.
Data on Tuesday showed that South Africa's unemployment rate inched up to 27.6pc in the first quarter, underscoring the scale of the economic challenge faced by President Cyril Ramaphosa after his ANC party won re-election.
"The South African economy started the year on a disappointing note ... The latest employment figures reflect these economic headwinds," said Jacques Nel, an economist at NKC African Economics.
In fixed income, the yield on the benchmark government bond due in 2026 shed 3.5 basis points to 8.49pc.
On the bourse, stocks continued to weaken, with the broader All-Share index down 0.25 percent to 56,234 points and the Top-40 index 0.21 percent weaker to 50,078 points.
"The market is very much still trading on the talks of the (US and China); one minute they're on, one minute they're off, and the market is very news driven at the moment," said Vasili Girasis, a trader at BP Bernstein.
South African conglomerate Bidvest lead the decliners on the blue-chip index with a 3.83 percent fall, while private healthcare provider Netcare continued to weaken a day after it warned on hospital margins.
It was 3.78 percent weaker at 21.63 rand.
Comments
Comments are closed.