05 Apr

Trump’s Trade War Could Hit South African Rand Through Oil Price

The path ahead looks challenging for South Africa’s rand, if oil prices are anything to go by.

Concern that U.S. President Donald Trump’s measures will trigger a trade war may hamper global growth and weaken demand for oil, according to Mehul Daya, a strategist at Nedbank in Johannesburg.

“Oil leads the rand,” Daya said. “Sixty percent of the movement in the rand can be explained by changes in the oil price since 1990.”

Talk of tit-for-tat tariffs has already hit the rand and other South African assets. The currency led emerging-market losses Wednesday and was down 0.8 percent to 11.9065 per U.S. dollar as of 2:43 p.m. in Johannesburg. The yield on rand-denominated bonds due December 2026 jumped seven basis points to 8.09 percent. Johannesburg’s equity benchmark tumbled 2.3 percent as escalating tensions between the U.S. and China dragged emerging markets lower.

“It’s all due to those trade wars and a lot of uncertainty,” said Marius Grobler, a trader at Unum Capital. “Investors are seeing a lot of fear on the market.”

Since 2016, oil has recovered from about $28 to $68 a barrel. That’s supported the rand, strengthening it to below 12 per dollar from more than 16, according to Nedbank.


Read the full article at Bloomberg Markets

 

12 Jan

Trump Calls Haiti, African Nations ‘Shithole’ Countries

President Donald Trump questioned senators in an Oval Office meeting Thursday on why the U.S. accepts immigrants from “shithole countries” like Haiti, El Salvador and African nations rather than places like Norway, according to three people briefed on the conversation.

The White House didn’t dispute the quotations. Asked about the account, White House spokesman Raj Shah said “certain Washington politicians choose to fight for foreign countries, but President Trump will always fight for the American people.”

Trump made the comments in a meeting with lawmakers who suggested restoring protections for people from those countries as part of a broader bipartisan agreement on immigration issues, the three people said. The Washington Post first reported Trump’s remarks.

Shah went on to list the White House’s demands for an agreement that would protect undocumented immigrants who were brought into the country as children and stressed that the president favors merit-based immigration.

The president made the comments on the eve of the eighth anniversary of the earthquake that devastated Haiti, killing as many as 300,000 people. On Thursday, Haitian President Jovenel Moise demanded a meeting with the top American diplomat in the country, Charge d’Affaires Robin Diallo, according to State Department officials. Moise was expected to lodge a formal protest. Michele Sison has been confirmed as the new U.S. ambassador, but has not yet arrived.

The officials, who asked for anonymity to discuss a diplomatic matter, are concerned that the episode may provoke protests in Haiti because commemorations have been planned to mark the anniversary.

In the U.S., strong criticism followed initial reports of the Oval Office episode, with most though not all of it coming from Democrats.

Democratic Senator Patrick Leahy of Vermont, who wasn’t in the meeting, in a tweet called the president’s remarks, “Breathtakingly offensive. Worse, it’s ignorant of American ideals.”

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