Rand firms in mild global risk reversal

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Emerging-market currencies have had a slight reprieve on Tuesday as no new threats on tariffs have been made in the US-China trade war

The rand was stronger on Tuesday afternoon in a third day of gains amid a mild reversal in global risk sentiment.

“We are seeing a moderate risk reversal as risk appetite improves and US [stock] markets are approaching high levels again. The risk reversal comes from the fact that we have not seen anything new, as far as the US-China trade war is concerned,” senior market analyst at Oanda Craig Erlam said. Both rates cuts and stimulus in developed markets benefit SA, as when there is more money in the global system, the hunt for higher returns becomes more earnest, with investors prepared to take on a little more risk for those better returns.At 2.50pm, the rand had firmed 0.56% to R14.6799/$, 0.66% to R16.2056/€ and 0.49% to R18.1488/£. The euro was flat at $1.1039.

 

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