After initially strengthening on Thursday, the local currency started to again weaker in the early afternoon to trade at R14.14 to the greenback.
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Asian stocks mixed on trade talks wait-and-see
Adam Haigh, Bloomberg
Asian stocks saw mixed trading Thursday as investors awaited the outcome of high-level trade talks between the US and China, and data on the Chinese economy.
The dollar held overnight gains, while Treasuries consolidated.Shares posted modest gains in Japan and Australia, and slipped in Hong Kong and Korea.
Mainland Chinese equities were little changed after a rally on the Shanghai Composite Index from January lows hit 10%.
The dollar steadied, while 10-year Treasury yields hovered around 2.7% following a report that showed US inflation remained contained.
There was little reaction to data showing that Japan’s economy rebounded somewhat in the fourth quarter, with the yen flat.
President Donald Trump told reporters in the Oval Office on Wednesday that talks to resolve the US trade war with China are making good progress, helping to steady investor sentiment.
US inflation numbers bolstered the Federal Reserve’s decision to be patient on raising interest rates and with many major central banks talking cautiously about global growth, investor attention is firmly focused on the outlook for trade.
Elsewhere, oil continued its rebound from a two-week low, after Saudi Arabia pledged to deepen output cuts, and held most of those gains even after US crude stockpiles came in larger than anticipated.
The S&P 500 Index came off its highs Wednesday after Senator Marco Rubio announced a bill to tax buybacks on equal footing with dividends.
Rand breaks above R14/$ on back of load shedding, strong dollar
“The rand is trading weaker at 14.0600 as a combination of Eskom troubles, poor local retail sales data and a stronger dollar hit the rand.
“Parliament heard yesterday from Pravin Gordhan that Eskom was insolvent and needed a huge cash injection by April to stay afloat. Rolling blackouts continue and are impacting negatively on sentiment.
“Retail sales data for December released yesterday showed a contraction of 1.4% against an expected 2.5% expansion. The dollar recovered late yesterday to be trading at 1.1282 against the euro and 1.2869 against the pound.
“The euro is being impacted by poor economic data and political uncertainty in Spain. US stocks closed in the black, however, Asian stocks besides the Nikkei are softer this morning. Gold is trading lower this morning at $1 308.90 while Brent is higher at $64.03. – Brought to you by TreasuryONE