JOHANNESBURG. — The South African rand was flat against the dollar in early trade on Friday as volumes thinned out in a holiday-shortened week, while the market focus remained on US – China trade deal developments.
The rand was flat at 14,1320 versus the greenback by 0653 GMT.
Overall trading activity was mostly subdued with global currency markets in a holiday mood after Christmas Day on Wednesday.
Traders returned from their Christmas and Boxing Day break to digest comments from Beijing that it was in close contact with Washington about an initial trade agreement, shortly after US President Donald Trump talked up a signing ceremony for the recently struck Phase 1 trade deal.
2019 GDP report was the second this year to show shrinkage in Africa’s most industrialised economy, raising the risk of a credit downgrade by Moody’s Investors Service as soon as the first quarter of 2020 that would rank the country among the junk, or non investment-grade borrowers. The contraction means full-year economic growth, which hasn’t exceeded 2percent since 2013, could be even lower than the 0.5percent projected by the Treasury in October, giving investors even more reason to ditch South African stocks and adding to outflows of $8,5 billion year-to-date. In fixed income, bonds were slightly stronger with the yield on the benchmark government paper due in 2026 was down 0.03 at 8,195percent. — Reuters.