Rand slips on US-China tensions
South Africa’s economy was in bad shape before the COVID-19 pandemic struck, with repeated bailouts for ailing state firms like power utility Eskom and South African Airways a drain on public finances.
by ReutersJOHANNESBURG - The rand slipped against the dollar on Monday as tension between the United States and China over civil liberties in Hong Kong dented appetite for riskier assets.
At 1525 GMT, the rand traded at R17.6750 per dollar, 0.4% weaker on the day, alongside falls in other emerging market currencies like the Russian rouble.
Over the weekend, the White House said China could face US sanctions as Beijing pressed ahead with a national security law in Hong Kong that threatens the city’s status as a financial hub.
But some economists predicted the rand would resume an upward trajectory before long, after gains of more than 4% against the US currency so far in May.
Investec analysts predicted the rand would strengthen towards R16 per dollar by year-end, supported by accommodative monetary policy by major central banks and hopes for a global economic recovery from the coronavirus crisis.
President Cyril Ramaphosa on Sunday announced a further easing in South Africa’s lockdown restrictions from 1 June, but the market reaction was muted.
South Africa’s economy was in bad shape before the COVID-19 pandemic struck, with repeated bailouts for ailing state firms like power utility Eskom and South African Airways a drain on public finances.
On the Johannesburg Stock Exchange (JSE), the Top-40 Index closed down 0.17% at 46,351 points and the broader All-Share Index slipped 0.15% to 50,074 points.
Miner AngloGold Ashanti was one of the biggest losers on the blue-chip index, falling 4.3% after it said on Sunday that its Mponeng mine would be closed after 164 workers tested positive for the novel coronavirus.
It said shortly after market close on Monday that the number of employees that had tested positive for the virus had risen to 196.
Government bonds were slightly firmer on Monday, with the yield on the 2030 bond down 6.5 basis points to 9.05%. JSE data showed offshore investors bought R2.17 billion of bonds last week.