South African Rand Falls On Subdued Risk appetite

Whatapp News

JOHANNESBURG      –       South Africa’s rand fell in early trade on Monday amid subdued risk appetite after a shock contraction in Chinese exports pointed to deepening cracks in the world’s second-biggest economy, raising fears of a sharper slowdown in global growth.

At 0618 GMT, the rand traded at 13.9175 per dollar, 0.6 percent weaker than its New York close on Friday of 13.8350.

“ZAR traded slightly weaker this morning due to much weaker-than-expected Chinese exports and imports figures for December,” analysts at NKC African Economics said in a note.

Latest data from China showed imports contracted 7.6 percent year-on-year in December when analysts had predicted a 5 percent rise while exports unexpectedly dropped 4.4 percent, confounding expectations for a 3 percent gain.

The disappointing numbers reinforced fears U.S. tariffs on Chinese goods were starting to take a heavy toll on China’s already cooling economy.

Locally, focus this week will mainly be on the South African Reserve Bank interest rates decision on Thursday. The bank is expected to hold rates at 6.75 percent, according to a Reuters poll.

In fixed income, the yield on the benchmark government bond due in 2026 added 5 basis points to 8.82 percent in early trade.(Reuters)

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