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Tuesday, 17th July 2018
1:51:48am

Economy

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South Africa’s rand gained on Thursday, reversing the previous session’s slide, as some traders picked up the currency at the current level, assuming the trade conflict between the United States and China would lead to another spell of risk aversion.

At 0700 GMT the rand was 0.44 percent firmer at 13.4875 per dollar, having touched a low of 13.5100 overnight as a fresh wave of risk aversion rocked emerging markets after President Donald Trump announced plans for additional tariffs on $200 billion worth of Chinese imports. 

Investors had avoided big positions for most of the week, and the rand traded mainly on technical factors with 13.50 and 13.20 the key entry and exit points.

Mining and manufacturing figures due out later are expected to show a lacklustre economic recovery in the second quarter after a contraction in the first, prompting some short positioning in preparation of a test near the 13.60 mark.

Bonds were weaker, with the yield on the benchmark bond due in 2026 up 2.5 basis points to 8.75 percent. 

The Johannesburg Stock Exchange’s Top40 index opened 0.2 percent higher at 51,150 points.

-Reuters             

Zambia will be careful to ensure its planned debt restructuring does not disrupt Chinese-financed projects, President Edgar Lungu said on Wednesday, after China’s ambassador to the southern African nation sought clarification on the matter.

China is a leading financier of infrastructure projects in Zambia, Africa’s No.2 copper producer, including roads and hydropower generation plants. 

Speaking after he met Chinese ambassador Li Jie, Lungu said there would be no disruption to financing arrangements, project implementation or contractual obligations.

Finance Minister Margaret Mwanakatwe would in the coming days lead a Zambian delegation to China for strategic consultations on the debt restructuring progamme, Lungu said.

Zambia said in February it would rearrange loans from Chinese companies as part of a debt management plan aimed at satisfying conditions set by the International Monetary Fund to unlock a potential $1.3 billion loan.

-Reuters

South Africa’s rand was firmer early on Monday, inching ahead to a new two-week best as slower-than-expected growth in wages in the United States pressured the dollar and solidified the local currency’s break of key technical levels.

At 0630 GMT the rand was 0.22 percent firmer at 13.4350 per dollar from a close of 13.4600 on Friday in New York.

The dollar index was 0.15 percent lower in early trade.

It was the first time since June 22 the rand had closed beneath 13.50, a key inflection point after it tumbled to a seven-month low of 14.00 in a broad emerging market rout as investors lured by rising rates in the U.S. fled riskier assets. 

U.S. jobs data on Friday showed a slower-than-expected growth in wages, suggesting the Federal Reserve may go slow on future rate hikes, boosting the rand and other EM assets.

Traders see 13.20 as the next key level, with mining and manufacturing output data later in the week the main onshore drivers of sentiment.

Lingering anxiety over the impact on global growth of the brewing trade spat between Beijing and Washington will restrain rand bulls, traders said.

Bonds tracked the firmer currency, with the yield on the benchmark bond due in 2026 down 2 basis points at 8.64 percent.

The Johannesburg Stock Exchange was set to open higher at 0700 GMT, with the Top 40 futures index up 1.2 percent.

-Reuters

Egypt's official statistics agency says annual inflation increased to 13.8% in June after a new round of austerity measures designed to overhaul the country's economy.

The figure, announced on Tuesday by the Central Agency for Mobilization and Statistics, is an increase from 11.4% in May.

Inflation peaked last summer, hovering around 30 percent after the government cut fuel and electricity subsidies as part of broader economic reforms to meet demands by the International Monetary Fund for a $12bn bailout loan.

The measures under President Abdel-Fattah al-Sisi caused prices of basic goods to spike, hitting poor and middle-class Egyptians especially hard.

-AP

South Africa’s rand edged weaker in early trade on Thursday. 

At 0630 GMT the rand was 0.13 percent weaker at 13.6950, above the 13.60 resistance mark that has recently drawn in sellers looking to pocket dollars cheap. 

“Over the most recent sessions, any sign of rand strength has seen renewed dollar buyers emerge, this scenario (is) not entirely unsurprising,” Nedbank analyst Reezwana Sumad said.

Trade across emerging market currencies has been volatile in recent weeks with the trade war brewing between the U.S. and China cooling risk demand, while the rand has also been restrained by lukewarm economic indicators.

Investors to eye release of minutes of the U.S. Federal Reserve’s last policy meeting.

Government bonds inched firmer, with the yield on the benchmark instrument due in 2026 falling 0.5 basis points to 8.745 percent.

The Johannesburg Stock Exchange was set to open flat at 0700 GMT, with the Top 40 futures index down 0.24 percent.

-Reuters 

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