South Africa's rand firmed on Wednesday, ending a two-day losing streak, as risk demand trickled back after being battered by worries about a highly infectious new variant of coronavirus in the country and elsewhere.

SOUTH Africa’s rand firmed on Wednesday, ending a two-day losing streak, as risk demand trickled back after being battered by worries about a highly infectious new variant of coronavirus in the country and elsewhere.

At 1500 GMT, the rand ZAR=D3 traded at 14.5725 against the U.S. dollar, 0.73% higher than its previous close.

The rand had been battered this week as countries around the world closed their borders to both Britain and South Africa following their identification of the fast-spreading variant of the coronavirus.

But on Wednesday the dollar declined, as investors drawn to the safe-haven currency pulled back. A combination of slack consumer confidence indicators showed the world’s number one economy was still feeling the impact of COVID-19.

This saw high-risk, high-yielding currencies like the rand and the Turkish lira, back in favour.

“Flush global liquidity conditions courtesy of the central banks, and SA’s rise up the carry attractiveness rankings, and the ZAR can still surprise with more strength in the short-to-medium-term,” said economists at ETM Analytics.

Shares on the Johannesburg Stock Exchange (JSE) continued to rise for a second day after two debilitating sessions which pulled the market back from 2018 highs.

The benchmark FTSE/JSE all-share index .JASLH closed up 0.63% at 58,987 points while the bluechip FTSE/JSE top 40 companies index .JTOPI ended 0.58% up to close the day at 53,959 points.

The rise was led by banks with the bank index .JBANK ended the trading day up 1.53% mainly on the back of rating agency Fitch’s upgrade on Tuesday of the top five banks ratings based on their creditworthiness.

Government bonds were flat, with the yield on the instrument due in 2030 ZAR2030= down 0.5 basis points to 8.755%.

(SOURCE: Reuters)

LEAVE A REPLY

Please enter your comment!
Please enter your name here