UPDATE 1-South Africa's rand rises on U.S.-China trade truce hopes

  • Reuters
  • Forex News
UPDATE 1-South Africa's rand rises on U.S.-China trade truce hopes
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JOHANNESBURG, May 12 (Reuters) - South Africa's rand firmed on Tuesday as demand for emerging markets was boosted by signs of easing tensions between China and the United States.

The stock market was also buoyed by the easing trade tensions despite fears of a second wave of coronavirus emerging in certain countries.

At 1530 GMT the rand ZAR=D3 was 0.88% firmer at 18.2600 per dollar having kicked-off the session at 18.4520.

The currency had been on the ropes for most of the day over global fears of a second wave of coronavirus infections as China, Germany and South Korea reported new infections, driving investors in to safe haven assets.

But optimism later in the session was lifted by a thaw in the trade spat between Beijing and Washington.

"China waived tariffs on certain U.S. imports today, giving rise to market optimism regarding economic recovery. This in turn assisted the rand, which has gained just over 1%, " said Bianca Botes from Peregrine Treasury Solutions.

China announced on Tuesday a new list of 79 U.S. products eligible for waivers from retaliatory tariffs imposed at the height of the bilateral trade war, amid continued pressure on Beijing to boost imports from the United States. Johannesburg Stock Exchange (JSE) climbed on Tuesday with the FTSE/JSE all share index .JALSH inched up 0.23% to close at 50,319 points, while the JSE top 40 rose 0.34% and closed at 46,518.

Market sentiment was also boosted by a rise in gold prices which pushed the JSE gold index .JGLDX higher by 2.47%.

Bonds were also firmer, with the yield on the government paper due in 2030 ZAR2030= down 12 basis points to 9.32%.

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