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JOHANNESBURG – South Africa’s rand weakened early on Tuesday, giving up small overnight gains as concerns about the U.S.-China trade war and the knock-on effect on global growth weighed on risk sentiment.
At 0630 GMT the rand was 0.21% weaker at 15.3100 per dollar, compared with an overnight close of 15.2825.
The rand had strengthened briefly beyond the 15.2500 mark in Asian trading after U.S. President Donald Trump on Monday flagged the possibility of a trade deal with China, days after both sides announced new tariffs.
But the relief did not last, with traders wary about the next bout of volatility and a potential emerging market-wide selloff, with the Brazilian real seen as the likeliest catalyst after Latin America’s largest economy saw its current account deficit widen sharply. [nE6N252024]
With no major local data due, the focus is likely to be on the ongoing political storm around South Africa’s top anti-corrpution official, Public Protector Busisiwe Mkhwebane, whose performance was set to be discussed in parliament on Tuesday.
Mkhwebane is in a court battle with President Cyril Ramaphosa after she published a report saying he “deliberately misled” parliament about the 500,000 rand ($32,500) donation for the 2017 campaign for leadership of the ruling party.
Bonds were weaker, with the yield on the benchmark government paper due in 2026 adding 2.5 basis points to 8.29%.
In equities, Imperial Logistics reported a 7% slump in full-year earnings. The firm said it incurred writedown costs from exiting its consumer packaged-goods business at home. – Reuters Africa
Bongani Ndlovu