South Africa’s rand gains on easing U.S.-China trade tensions

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South African bank notes featuring images of former South African President Nelson Mandela (R) are displayed next to the American dollar notes in this photo illustration in Johannesburg August 13 2014. REUTERS/Siphiwe Sibeko

JOHANNESBURG (Reuters) – South Africa’s rand gained early on Monday on reports of progress in trade talks between China and the United States on the year’s last day of trading.

At 0715 GMT the rand traded at 14.3650 per dollar, up 0.42 percent from its close of 14.4250 on Friday.

Dollar moves were driven mainly by U.S. politics and the tariff war between Beijing and Washington remained the key catalysts for the rand and other emerging-market currencies, with investors cautious in thin-volume trade.

The trade war between the world’s top two economies has unnerved financial markets and had a mixed impact on the rand, which has lately benefited from signs of a thaw in hostilities between the two superpowers.

On Sunday, U.S. President Donald Trump said a possible trade deal between the United States and China was progressing well, creating some demand for high-yield assets like the rand, which had lost ground to safe-haven assets at the end of the previous week.

For the year, the rand is down nearly 15 percent, making it the fourth worst performer against the dollar, behind the Argentine peso, Turkey’s lira, and the Russian rouble.

Bonds opened firmer, with the yield on the benchmark paper due in 2026 3 basis points lower at 8.865 percent.

Stocks opened higher, with Johannesburg Stock Exchange’s (JSE) Top-40 index up 0.58 percent to 46,765 points.

Reporting by Mfuneko Toyana, editing by Larry King

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Godwin Okafor is a Financial Journalist, Internet Social Entrepreneur and Founder of Naija247news Media Limited. He has over 16 years experience in financial journalism. His experience cuts across traditional and digital media. He started his journalism career at Business Day, Nigeria and founded Naija247news Media in 2010. Godwin holds a Bachelors degree in Industrial Relations and Personnel Management from the Lagos State University, Ojo, Lagos. He is an alumni of Lagos Business School and a Fellow of the University of Pennsylvania (Wharton Seminar for Business Journalists). Over the years, he has won a number of journalism awards. Godwin is the chairman of Emmerich Resources Limited, the publisher of Naija247news.

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