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South Africa’s rand falters after Trump tests positive for coronavirus

South Africa’s rand falters after Trump tests positive for coronavirus



South Africa’ rand weakened early on Friday as United States President Donald Trump’s overnight announcement that he had tested positive for COVID-19 dampened risk demand.

At 0645 GMT the rand ZAR=D3 was 0.6% weaker at 16.7000 per dollar from a close of 16.6000 overnight, halting a recovery that has seen the unit gain around 4% this week.

In a tweet, Trump said he and his wife Melania Trump had both tested positive and would begin quarantine immediately. set-off more volatility in currency markets already unnerved by the upcoming U.S. presidential elections in November and fears of a second wave of coronavirus infections in the United States as well as Europe.

“The rand is trading defensively along with other higher-risk assets in thinned liquidity conditions due to market holidays in China and India,” said market economists at ETM Analytics in a note.

“Ahead of the non-farm payrolls data later this afternoon, momentum may well stall, but given the over-riding news of Trump’s illness, market sentiment will remain a constraint to riskier currencies including the ZAR.”

Bonds also weakened, with the yield on the benchmark 2030 government issue ZAR2030= up 4.5 basis points to 9.45%.



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