South Africa's rand weaker as rally stalls on global trade war worries

Mar 15, 2018

South Africa’s rand was weaker on early on Thursday, giving up the previous session’s modest gains as investors opted to pocket small profits as trade war noises continued and short-term technical targets came into view.

* At 0630 GMT, the rand was 0.13 percent weaker at 11.7700 per dollar, having traded as firm as 11.7375 on Wednesday as U.S. President Donald Trump’s firing of Rex Tillerson as secretary of state dented optimistic bets on the world’s largest economy.

* The relief for emerging market and commodity-linked currencies did not last with traders opting to take profits in uncertain conditions.

* The appointment of conservative economic analyst Larry Kudlow as Trump’s top economic adviser, which suggests trade tensions with China could escalate, added to investor nervousness.

* With the rand failing to break below 11.70 since the last day of February, and the carry trade attraction dimming compared to fellow EM’s as the central bank looks set to cut lending rates at month-end, forward momentum has stalled.

* In fixed income, the yield for the benchmark government bond due in 2026 was flat at 8.095 percent.

Reporting by Mfuneko Toyana; Editing by Richard Borsuk JOHANNESBURG (Reuters)

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