South African rand weakens as global trade tensions sap risk appetite

JOHANNESBURG – South Africa’s rand weakened against the dollar early on Wednesday as U.S.-China trade tensions sparked market fears that the standoff between the world’s two largest economies could spiral into a trade war which could crush global growth.

A street money changer counts South African Rands in Harare, Zimbabwe, May 5, 2016. REUTERS/Philimon Bulawayo

At 0631 GMT, the rand traded at 11.8600 per dollar, 0.3 percent weaker than its overnight close.

U.S. President Donald Trump administration announced 25 percent tariffs on $50 billion of annual imports from China, covering around 1,300 industrial technology, transport and medical products. China’s commerce ministry immediately warned it was preparing countermeasures of equal intensity.

“Global trade tensions continue to weigh on risk appetite, and until common ground is found safe-haven demand would remain as the best form of defence,” Nedbank analysts wrote in a note.

In fixed income, the yield for the benchmark government bond was up 1.5 basis points to 8.03 percent. – BusinessLive