Asian markets were surprisingly calm after the US commenced its threatened trade war against China at midnight Washington time — or 6am on Friday in SA.
“A trade war between the world’s two largest economies officially began on Friday morning as the Trump administration followed through with its threat to impose tariffs on $34bn worth of Chinese products, a significant escalation of a fight that could hurt companies and consumers in both the US and China,” the New York Times reported.
Chinese stock markets were down less than 0.5% while Tokyo’s Topix index rose more than 1% ahead of the JSE’s opening on Friday.
The rand — which strengthened from R13.73 to R13.51 to the dollar on Thursday afternoon ahead of the US implementing its threatened tariffs — held on to most of its gains overnight.
The rand was trading at R13.55 to the dollar, R15.84 to the euro, and R17.91 to the pound at 6.30am.
The world now awaits to see how China will retaliate against the US. Beijing is expected to slap import duties on US goods including pork, soybeans and cars.
SA’s Reserve Bank is scheduled to release SA’s gross reserve figures for June at 8am.
A poll of economists by Trading Economics forecasts SA’s gross reserves to have increased slightly from May’s $51.15bn.
“Although foreign exchange reserves only roughly cover external debt due in the short term, and may fall further as investors continue to adjust their portfolios globally, a large proportion of government and economy-wide external debt is in domestic currency implying that SA’s credit metrics are resilient to further weakening in the rand,” Moody’s said in an analyst note e-mailed on Tuesday. –BusinessLive