The rand firmed to R14.13/$ in intraday trade on Thursday afternoon, its best level in five weeks, as talk of the possibility of a truce being struck in the US-China war at the upcoming Group of 20 (G20) summit lifted sentiment.
US President Donald Trump signalled the possibility of a deal that could put an end to the prolonged trade war, as he is expected to meet Chinese President Xi Jinping at the summit in Japan on Saturday. Trump said, however, he was also prepared to impose more tariffs on China should the upcoming talks fail.
The Chinese government has insisted that the US lift sanctions on Chinese telecoms company Huawei, after banning it from the US market in May. Earlier in June, Trump said the Huawei saga could be resolved as part of the trade talks.
“For the benefit of the global economy, they [the US and China] might both have to make some concessions. It's going to be very difficult for them to find common ground, however. I would not be surprised if we get to Monday next week and find there hasn't been anything conclusive, which could then see the rand start to weaken,” said FNB Wealth and Investments portfolio manager Kabelo Tshola.
At 2.50pm the rand had strengthened 0.48% to R14.1580/$, 0.49% to R16.0941/€ and 0.29% to R17.9941/£. The euro was flat $1,1368.
The benchmark R186 government bond was stronger, with the yield falling six basis points to 8.09%. Bond yields move inversely to bond prices.
Gold had fallen 0.53% to $1,401.27/oz and platinum 0.35% to $813.62. Brent crude was down 0.24% to $66.04 a barrel.
Producer inflation for May moderated to 6.4% year on year from 6.5% in April, Statistics SA said on Thursday.
- BusinessLIVE
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