The currency is under pressure after Donald Trump’s comments about land expropriation, but the dollar is also firmer ahead of Jackson Hole meeting
The rand was somewhat weaker against major global currencies on Thursday afternoon, under strain from news that the White House would be monitoring land expropriation in SA.
The rand weakened after US President Donald Trump tweeted that he had instructed the state department in the US to study farm murders and land expropriation. The tweet followed warnings by US policy think-tank, the Cato Institute, that SA was on the path to a Zimbabwe-style land disaster.
The issue raised the “fear profile” around the land issue for the rand, Standard Bank currency trade Warrick Butler said. This was, however, coming amid a dollar recovery.
The dollar rebounded from its recent lows on Wednesday, after US Federal Reserve officials provided somewhat less-hawkish commentary in minutes from its August meeting on Wednesday. The implementation of further tariffs by the US on China also supported the greenback, analysts said, a move that comes as US and Chinese officials meet this week to discuss their differences.
Global data was mixed. Earlier, the German purchasing managers index (PMI) for manufacturing printed below expectations, although services beat forecasts. Economic growth was consolidating in the eurozone, but trade-war related risks remained, Barclays Research analysts.
Global market focus is now expected to shift to a meeting of global central bankers in Jackson Hole, Wyoming. The meeting gets under way on Thursday, but focus will be on a speech by Fed chair Jerome Powell on Friday.
At 3pm, the rand was at R14.2235 to the dollar, from R14.1658, R16.4631 to the euro from R16.4274, and at R18.5742 to the pound from R18.2886.
The euro was at $1.1574 from $1.1597.
At the same time the benchmark R186 government bond was bid at 8.94% from 8.935% while the R207 was unchanged at 7.6%.
Source: Business Day (SA)