South African rand extends losses as traders await outcomes of rate meeting, US tariffs
At 0733 GMT, the rand traded at 17.9725 against the dollar , about 0.6% weaker than Monday's close.
ETM Analytics in a research note said the risk-sensitive currency is expected to remain vulnerable as there were still no updates on the country's progress in negotiating a trade deal with the U.S. while the August 1 deadline edges closer.
'It may be that the announcement is only made on Friday, which may help clarify SA's trade position with the U.S., but in the lead-up to that, there is some concern that SA's negotiators have not made much progress and will have to accept whatever the U.S. puts on the table,' said the note.
The nation's central bank will announce its rate decision on Thursday, when another 25 basis point cut is expected by economists polled by Reuters.
Central bank data earlier showed that South Africa's M3 money supply growth last month was at 7.27%, up from 6.86% in May. Credit growth for June came in at 4.98%, unchanged from the previous month.
'Credit growth is starting to pick up, reflecting the impact of lower interest rates and some improvement in household finances due to rising income and lower inflation,' said Nedbank economists.
South Africa's benchmark 2035 government bond was weaker in early deals, as the yield rose 2.5 basis points to 9.825%.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Recorder
9 hours ago
- Business Recorder
Coffee prices rise as US imposes tariffs on top exporter Brazil
LONDON: Arabica coffee prices rose on Thursday but gains were muted overall as traders continued to hold out hope that the United States could exempt coffee from its 50% trade tariff on most Brazilian goods. U.S. President Donald Trump on Wednesday slapped the 50% tariff on Brazil to fight what he has called a 'witch hunt' against former Brazilian President Jair Bolsonaro, but excluded some key sectors like energy and orange juice. Coffee has not yet been excluded from the 50% tariff, raising the prospect that trade between the world's largest coffee producer and the top consumer of the commodity could be severely disrupted. Brazil's coffee exporters said in a statement they would continue to push for exemptions. The new tariffs come into effect August 6, not on Friday as originally planned. 'Another week until 50% comes into effect. Most (sector participants are) still hoping for a general coffee exclusion. I think it's unlikely,' said a Europe-based trader at a top global coffee trade house. Prices are expected to rise in the short term if a 50% tariff is imposed, with a scramble for stocks and a major upheaval in global trade flows likely as supplies are redirected to new destinations. Arabica coffee steadies as market awaits tariff developments In the longer term, however, tariffs are set to weigh on world coffee prices as they would likely hurt demand in top consumer the U.S. by boosting the country's already inflated coffee prices. The U.S. is almost entirely reliant on coffee imports with the quantities grown in Hawaii and Puerto Rico accounting for less than 1% of its consumption. Brazil accounts for around one-third of the U.S. imports. ICE arabica coffee futures, seen as a global price benchmark, were up 1.9% at $2.9220 per lb at 1320 GMT, having closed down 1% on Wednesday, while robusta coffee slipped 0.4% to $3,332 a metric ton, having closed up 1.7% in the prior session. Cocoa prices were also higher with London futures up 2.9% at 5,489 pounds per ton while New York futures gained 2.8% to $7,703 a ton. Raw sugar fell 0.7% to 16.33 cents per lb while white sugar was down 0.3% at $468.50 a ton.
Business Recorder
9 hours ago
- Business Recorder
Oil prices ease as market weighs Trump tariff threats and US stock build
LONDON: Oil prices fell on Thursday as investors weighed the supply risks from U.S. President Donald Trump's push for a swift resolution to the war in Ukraine through more tariffs, while a surprise build in U.S. crude stocks on Wednesday also weighed on prices. Brent crude futures for September, set to expire on Thursday, declined by 61 cents, or 0.83%, to $72.63 a barrel by 1326 GMT. U.S. West Texas Intermediate crude for September fell 68 cents, or 0.97%, to $69.32. Both benchmarks lost ground on Thursday after recording 1% gains on Wednesday. 'The market front-runs the implications of President Trump's announcements before remembering that these policy intentions can turn on a dime if he can strike a deal,' said Harry Tchiliguirian at Onyx Capital Group. 'We're seeing a re-evaluation until there is more clarity,' he added. Trump said he would start imposing measures on Russia, including 100% secondary tariffs on its trading partners, if it did not make progress on ending the war in Ukraine within 10-12 days, moving up an earlier 50-day deadline. The U.S. has also warned China, the largest buyer of Russian oil, that it could face huge tariffs if it kept buying. On Wednesday, the U.S. Treasury Department announced fresh sanctions on more than 115 Iran-linked individuals, entities and vessels, stepping up the Trump administration's 'maximum pressure' campaign after bombing Iranian nuclear sites in June. Meanwhile, U.S. crude oil inventories rose by 7.7 million barrels to 426.7 million barrels in the week ending July 25, driven by lower exports, the Energy Information Administration said on Wednesday. Analysts had expected a draw of 1.3 million barrels. Gasoline stocks fell by 2.7 million barrels to 228.4 million barrels, far exceeding forecasts for a draw of 600,000 barrels. 'U.S. inventory data showed a surprise build in crude stocks, but a bigger than expected gasoline draw supported the view of strong driving season demand, resulting in neutral impact on the oil market,' said Fujitomi Securities analyst Toshitaka Tazawa.
Business Recorder
10 hours ago
- Business Recorder
US copper tumbles on tariff news, LME erodes on tepid demand
LONDON: US copper prices registered the biggest one-day decline on record on Thursday as investors scrambled to adjust positions after a surprise move by US President Donald Trump to exclude widely traded refined metal from 50% import tariffs. 'The impact of the Trump announcement … was seismic,' said Marex analyst Ed Meir. US September Comex copper futures tumbled 22% to $4.37 a lb, or $9,681 a metric ton, by 1130 GMT, having touched a record peak of $5.92 a week ago. After Trump announced an investigation into copper tariffs in February, U.S. prices climbed and huge flows of copper were shipped there to take advantage of the premium. But details released late on Wednesday said 50% tariffs would be applied to semi-finished copper products, excluding copper cathodes and input materials such as ores. Copper trading on major exchanges is based on cathodes, the result of processing copper. 'I'd imagine it's a disaster for some people,' said Dan Smith, managing director at Commodity Market Analytics. Copper slips to over one-week low on tariff, demand worries 'You spent all this money getting stuff across to America and then, it's going to have to sit there, isn't it?' Benchmark three-month copper on the London Metal Exchange was down 0.7% at $9,631 a ton. The slide in Comex prices flipped its premium over LME, which had traded at about $3,000 a ton last week, to a $4 discount on Thursday. If LME prices settle at a healthy premium to Comex, that could further boost LME copper inventories, which have already jumped about 50% over the past month. 'LME stocks could now rise much quicker on direct deliveries of U.S. copper to U.S. LME warehouses if price differentials attract it,' JP Morgan said in a note. Copper prices are likely to remain weak in the short term, partly owing to a seasonal lull in demand, Smith said. The most-traded copper contract on the Shanghai Futures Exchange eased 1.3% to 78,040 yuan ($10,850.95) a ton. Also weighing on prices was data showing that manufacturing activity in top metals consumer China shrank for a fourth month. Among other metals, LME aluminium lost 0.7% to $2,583 a ton, zinc eased by 0.8% to $2,763.50, nickel dipped 0.4% to $14,960 and lead was down 0.9% at $1,973.50 while tin retreated 2.2% to $32,630.
