US Markets

South Africa's rand on the ropes as global risk aversion intensifies

Credit: REUTERS/ROGAN WARD

South Africa's rand weakened for a third straight session early on Tuesday as global growth worries linked to the trade spat between China and United States and souring local sentiment kept investors eyeing key selling levels.

JOHANNESBURG, Aug 13 (Reuters) - South Africa's rand weakened for a third straight session early on Tuesday as global growth worries linked to the trade spat between China and United States and souring local sentiment kept investors eyeing key selling levels.

At 0650 GMT the rand ZAR=D3 was 0.26% weaker at 15.3450 per dollar, back tracking after a brief run to 15.2400 as technical support at 15.50 came into focus.

Demand for riskier assets has cooled since U.S. President Donald Trump said on Friday he was not ready to make a trade deal with China.

Aversion to risk and emerging market assets was also stoked by defeat for Argentina's business-friendly president Mauricio Macri in primary elections, sparking a selloff that spread from the South American country to Turkey, Mexico and South Africa.

Traders said a breach of 15.50 and 15.6950 this week could see the rand's losses intensify rapidly as stop losses were triggered and investors fled to safe haven assets.

Bonds were slightly firmer, with the yield on benchmark government paper due in 2026 ZAR186= down 1.5 basis points to 8.47%.

On equity markets, lender Absa ABGJ.J reported a 5% rise in first-half profit, while its core retail business managed to grow despite a faltering domestic economy.

(Reporting by Mfuneko Toyana; Editing by Kirsten Donovan)

((mfuneko.toyana@thomsonreuters.com; +27117753153; Reuters Messaging: mfuneko.toyana.thomsonreuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Other Topics

World Markets

Reuters

Reuters, the news and media division of Thomson Reuters, is the world’s largest international multimedia news provider reaching more than one billion people every day. Reuters provides trusted business, financial, national, and international news to professionals via Thomson Reuters desktops, the world's media organizations, and directly to consumers at Reuters.com and via Reuters TV.

Learn More