JOHANNESBURG - The rand weakened on Friday as the emergence of a fresh source of tension between the United States and China after Beijing moved to impose a new security law on Hong Kong hurt demand for currencies seen as higher risk.
At 1645 GMT, the rand was 0.64% weaker at R17.7220 per dollar, having rallied to R17.5100 in the previous session, its highest since 27 March. Thursday’s rise was spurred by the South African Reserve Bank’s decision to cuts its main lending rate for a fourth time this year to provide relief to households and firms battered by a nationwide lockdown linked to the coronavirus outbreak.With friction between Washington and Beijing already mounting over the source of the coronavirus pandemic, China’s proposal on Thursday to impose security laws on Hong Kong prompted a strong warning from US President Donald Trump.
The Johannesburg Stock Exchange followed the main global markets and shed the last few days’ gains, with the benchmark FTSE/JSE all-share index losing 1.7% to end the week at 50,156 points.Bonds weakened alongside the currency, with the yield on the 2030 government bond adding 17.5 basis points to 9.075%.
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