TreasuryONE's Andre Botha said that the rand remains volatile despite trading in a narrow band.

At 10:11, the rand was changing hands at R14.20 to the greenback.

"With the uncertainty surrounding the US-China trade deal, markets are waiting on any headline and reacting to it. That was in evidence yesterday when President Donald Trump announced that the US will not impose auto tariffs for six months.

"By delaying the tariffs on autos Trump has averted ruffling the EU's feathers, with imposing tariffs on EU auto exports and calming markets regarding the US-China trade deal and global growth in general. 

"We have seen risk trundling back into the markets with equity markets all ending in the green clawing back some of the losses it has suffered over the past few days. However, with the flip flop nature of the recent trade talks, it would be of little surprise if the market is taking a cautious approach until a trade deal has been agreed upon. 

"In the commodity space, we have seen that gold has weakened slightly on the back of Trump's comments with the risk-averse nature of the markets subsiding a little. Oil is trading above the $70 level per barrel as various global supply threats have rocked the market. Tensions in the oil market are evident everywhere from the Persian Gulf to Venezuela. 

"Locally, the rand seems happy to trade in the mid R14.20's with every break below R14.20 being swiftly arrested as well as any move close to the R14.30 level. It seems that the rand is waiting for a catalyst to give it some direction, with the US-China and South African Cabinet announcement being the two major events in the immediate future that could give direction to the rand.

"We expect the market to be cautious and we could see the rand still in narrow trading ranges while the status quo holds.”

Stocks under pressure as trade tensions fester

Adam Haigh, Bloomberg

US equity futures declined and the yen edged up as Sino-American tensions continued to flare, leaving Asian equities volatile.

Stocks fell in Tokyo and Seoul along with S&P 500 Index futures after President Donald Trump moved to curb Huawei’s access to the U.S. market and American suppliers.

Indexes in Hong Kong and China were modestly higher. Australian government bond yields plumbed fresh all-time lows and the Aussie fell as the unemployment rate unexpectedly rose, though the moves eased.

Treasuries held steady after the two-year yield touched the lowest level since February 2018. Ten-year yields were at 2.37%. Oil rose above $62 in New York.

On Wall Street Wednesday, US equities closed higher as Bloomberg reported Trump would postpone by up to six months a decision on car tariffs that was due by Saturday.

Anxiety remains after unexpectedly weak US and Chinese economic numbers Wednesday heightened worries the trade war could weigh on a global economy that’s already slowing.

The actions on Huawei risk aggravating Beijing as the president seeks to pressure China’s leaders into agreeing to a wide-ranging trade deal with the US.

In the latest development, Trump signed an executive order Wednesday that could restrict Chinese telecommunication firms Huawei and ZTE from selling their equipment in the US, ratcheting up the battle for control over new 5G technology networks.

Rate-Cut Bets

Meanwhile, traders are increasing bets on the Federal Reserve cutting borrowing costs later this year.

Federal Reserve Bank of Richmond President Thomas Barkin said while he favours keeping interest rates on hold for now, he worries that business confidence is fragile amid slowing global growth and trade disputes.

“Depending on how long this standoff with China lasts, that impacts growth for longer and might force the Fed’s hand,” Esty Dwek, senior investment strategist at Natixis Investment Managers, told Bloomberg TV in Singapore. “I wouldn’t expect any big change in the short term, but the possibility of a cut much later in the year has risen.”