Rand a little firmer after new Chinese stimulus

File: The rand remains the most volatile currency on a one-week basis, according to Bloomberg, although its volatility has eased from levels seen last week.

File: The rand remains the most volatile currency on a one-week basis, according to Bloomberg, although its volatility has eased from levels seen last week.

Wikimedia Commons

JOHANNESBURG - The rand was boosted along with Asian equity markets on Monday morning, lifted a little by new Chinese economic stimulus measures as well as some good news regarding the US-China trade war.

Economic data indicating the global economy was slowing created turmoil in global markets, but governments have indicated they will respond with stimulus, with China lowering borrowing costs on Saturday.

READ: Rand continues to plunge

Reports on Friday also suggested the German government was willing to relax its strict budget-deficit rules in response to its flagging economy helped boost risk assets towards the end of last week.

At 9.30am on Monday the rand was 0.15 percent firmer at R15.2911/$, 0.11 percent up at R16.971/€ and 0.31 percent to the better at R18.5544/£. The euro was flat at $1.1102.

The rand remains the most volatile currency on a one-week basis, according to Bloomberg, although its volatility has eased from levels seen last week.

Global markets were also lifted by news that the US and China will continue talks over the next week to 10 days, although US President Donald Trump said at the weekend that the US was “not ready” for a deal yet.

READ: Trump does not want to do business with China's Huawei

The news that the US is seeking to revisit trade talks with China, which will bring some much-needed stability to the market, and risk-off sentiment could further dissipate, said TreasuryOne senior currency dealer Andre Botha.

Focus this week is on monetary policy, with US Federal Reserve minutes from its last meeting due on Wednesday, while Fed chair Jerome Powell’s comments at the Jackson Hole conference in Wyoming will be closely watched on Friday.

Source
IRESS