Photo illustration of South African bank notes displayed next to the American dollar notes in Johannesburg

South Africa's rand steady on thaw in trade tensions

JOHANNESBURG (Reuters) - South Africa's rand inched slightly up in early trade on Monday, holding near a 3-week high it hit in the previous session, as risk sentiment strengthened following signs of progress in U.S.-China trade talks and a Brexit breakthrough.

At 0610 GMT, the rand was 0.05% firmer at 14.7470 per dollar, not far from Friday's rally to 14.7100.

On Friday, U.S. President Donald Trump said the United States and China had reached a "Phase 1" trade deal and suspended a threatened tariff hike, spurring a rally of emerging market currencies led by the rand.

In South Africa, with no local data due in the session, positioning will continue to be influenced to by offshore developments, traders said.

"The current levels of the local unit likely to attract some dollar buying interest, technically an attempt on 14.6000 remains a likely scenario," traders at Nedbank said in a note.

Reports on Friday that European Union and Britain would hold intense talks over the next few days to secure a deal for Britain's departure from the bloc as the Oct. 31 deadline looms large, also helped demand for currencies.

Bonds were slightly firmer, with the yield on the benchmark paper due in 2026 down 0.5 basis points to 8.23%.

(Reporting by Mfuneko Toyana; Editing by Rashmi Aich)

2019-10-14 08:55:57

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