The rand was doing slightly better against major global currencies on Friday afternoon, as US President Donald Trump’s threats to put tariffs on Mexican imports sent ripples through global markets.
After coming under sustained pressure and falling through R14.80/$ earlier, the rand was faring better in the afternoon, with the euro making a small comeback against the dollar.
US data on Friday showed that consumer spending slowed in April, yet another signs the US economy was losing momentum, Dow Jones Newswires reported.
Global sentiment, however, was somewhat negative, which was reflecting in equity markets.
Trump has threatened to levy tariffs on Mexico as he seeks to meet his electoral pledge of reducing illegal immigration. The global mood soured and the Mexican peso slumped, with investors shying away from risk assets.
At 2.42pm on Friday the rand was 0.18% firmer at R14.6966/$, flat at R14.3897/€, and up 0.39% to R18.4947/£. The euro had firmed 0.2% to $1.1152.
The rand has lost 1.93% against the dollar this week, having been volatile amid global fears about the trade war, as well as domestic political developments.
The rand dropped to the third-most volatile currency on a one-week basis on Friday, according to Bloomberg data, with the peso vaulting both the rand and the Turkish lira.
The primary concern in the market remains the trade war, but the next major issue locally could be any announcement as to the future of Eskom.
There was more bad news on Friday, with China also confirming it was ready to restrict exports of rare-earth minerals amid its trade dispute with the US, said London Capital Group head of research Jasper Lawler. China’s official factory activity readings for May, the manufacturing purchasing managers index (PMI), fell deeper into contraction than markets had expected, bringing into sharp focus the effects of the trade war.
SA’s own economic position will be in focus next week, with the release of first-quarter GDP numbers. The economic consensus, according to Bloomberg, is for SA’s economy to have contracted 1.6% year-on-year for the quarter.