LONDON (Reuters) – South Africa’s rand recovered against the dollar on Tuesday after a drop to seven-week lows caused by renewed U.S.-China trade tensions.
At 0713 GMT, the rand was up 0.6% to trade at 14.8275 per dollar, having sunk as low as 14.9900 on Monday, its lowest since mid-June.
The rand had been knocked back by the prospect of a sharp escalation in the U.S.-China trade war, but steadied before it breached 15 rand to the dollar.
After U.S. President Donald Trump announced tariffs would be imposed on $300 million of Chinese imports, China let its currency, the yuan, weaken beyond 7 to the dollar on Monday. The U.S. Treasury Department then designated China a currency manipulator, a step that could lead to more increases in tariffs.
“The news offshore is far bigger than the South African story at the moment,” said Andre Botha, senior currency dealer at TreasuryONE. Dollar moves and Trump’s comments were driving appetite for risk globally, he said.
“Even though there’s a little bit of risk in the rand, we feel that it’s overdone, and we can see some consolidation,” Botha said.
The yield on the benchmark government bond due in 2026 edged down 2 basis points to 8.420%.
(Reporting by Alistair Smout, editing by Larry King)