Rand recovers in early trade

IOL pic aug4 rand vs dollar REUTERS Picture: Siphiwe Sibeko

Johannesburg - South Africa's rand regained some ground on Friday as calm returned to global markets following frenetic trade and increased risk aversion triggered by the European Central Bank's suggestion that there would be no further cuts.

Stocks opened higher at 07h00 GMT, with the JSE securities exchange's Top-40 index up 0.7 percent.

By 07h01 GMT the rand had gained 0.6 percent to 15.2800 per dollar, riding the wave of broad market correction and a weaker greenback after threatening to breakthrough the 15.50 mark in overnight trade.

“The market does not like it up here and the assault on 15.00 will likely kick-off in earnest. Exporters are starting to tame their greed and importers are now more settled,” said currency trader at Standard Bank Maemo Rametse.

The rand had raced to a 2-1/2 month low of 15.0250 after the ECB slashed interest rates and notched up its stimulus program on Thursday, but turned sharply as risk sentiment swung when ECB President Mario Draghi's comments at a press conference suggested the bank had reached the end of its rate cut cycle.

With no local data due, traders said the rand would hold steady with direction coming from broader emerging market sentiment.

Government bonds were flat with the bench paper due in 2026 at 9.18 percent after rallying to a one-month low in the previous session.


Like us on Facebook

Connect with us on LinkedIn

Follow us on Twitter

Hungry for more business news? Sign up for our daily newsletter!

sign up