Rand firmer as good news stacks up
The rand held onto its earlier gains on Monday afternoon, continuing to be lifted by a surge on risk-on trade after the US and China agreed to a truce in their continuing trade war.
The agreement by US President Donald Trump and Chinese President Xi Jinping of a three-month halt to further trade actions has lifted markets, which were also digesting a surging oil price on Monday.
Brent crude rose more than 5% on the news of the trade truce and ahead of a key meeting of oil cartel Opec this week, which is widely expected to result in hefty production cuts.
The trade conflict has been one of a number of negative factors that has dragged oil lower over the last couple of months, and even now it is trading around 30% off its peak, said Oanda analyst Craig Erlam.
At 2pm the rand was 0.49% firmer against the dollar at R13.6724, 0.67% against the euro at R15.4931 and 0.85% against the pound at R17.3905. The euro was 0.17% weaker at $1.1333.
Earlier, local news was somewhat positive, with the Absa purchasing managers’ index (PMI) for November climbing to 49.5 index points in November, from a depressed reading of 42.4 in October.
Operating conditions for the manufacturing sector looked set, however, to remain challenging, said Investec economist Kamilla Kaplan.