By the close of trade on Friday, the South African rand strengthened against the US dollar.

  • In the US, nonfarm payrolls increased less-than-expected and the unemployment rate tumbled in August, as the US economy continued to climb its way out of the pandemic downturn.
  • China may gradually cut its holdings of U.S. Treasury bonds and notes, in light of rising tensions between Beijing and Washington, state-backed newspaper Global Times cited experts as saying. With Sino-U.S. relations deteriorating over various issues including coronavirus, trade and technology, global financial markets are increasingly worried if China would sell the U.S. government debt it holds as a weapon to counter rising U.S. pressure.
  • The Trump administration is considering imposing export restrictions on Semiconductor Manufacturing International Corporation, China’s largest manufacturer of semiconductors, according to a Defense Department spokesperson. The Department of Defense is in discussions over whether SMIC should be added to the Commerce Department’s entity list, which essentially restricts those companies from receiving specific goods made in the United States. The U.S. entity list now includes more than 300 China-based companies.
  • The United States Department of Justice last month announced the dismantling of three terrorist financing cyber-enabled networks involving the al-Qassam Brigades, the military wing of the Palestinian Hamas group; al-Qaeda; and Islamic State. The justice department claimed the effort resulted in the biggest seizure of terrorist organisations’ cryptocurrency. The bust spotlighted the US’ increasing use of financial sanctions and other forms of economic coercion to either neutralise threats or alter a nation’s conduct, as opposed to military means.
  • The yield on benchmark government bonds rose on Friday. The yield on 2026 bond advanced to 7.30%. Further, the yield on 2023 bond rose to 4.49% while that for the longer-dated 2030 issue climbed to 9.19%.

In early trade on Monday, the US dollar is trading higher against the South African rand at R16.5917, while the euro is trading higher at R19.6401.  The British pound has gained against the South African rand to trade at R21.9627

By the close of trade on Friday, the euro declined against most of the major currencies.

  • German factory orders came in weaker-than-expected on a monthly basis in July, indicating that an initial snap back from the coronavirus shock is fading into a slower recovery in Europe’s largest economy.
  • In the UK, a Bank of England rate-setter, Michael Saunders stated that it was quite likely that Britain’s COVID-hit economy would need more stimulus to offset what may be years of social distancing and the growing risk of post-Brexit trade barriers.
  • British Prime Minister Boris Johnson talked tough on Sunday ahead of a crucial round of post-Brexit trade talks with the European Union, saying Britain could walk away from the talks within weeks and insisting that a no-deal exit would be a “good outcome for the U.K.” With talks deadlocked, Johnson said an agreement would only be possible if EU negotiators are prepared to “rethink their current positions.” The EU, in turn, accuses Britain of failing to negotiate seriously.

In early trade on Monday, the euro has advanced against the US dollar to trade at $1.1890, while it has gained against the British pound to trade at GBP0.9056.