Rand firmer as technicals point to recovery

South Africa‘s rand firmed early on Wednesday with investors seeing some buying value as technical indicators pointed to a mild recovery in a currency that has suffered recently against a surging dollar.

At 06:40 GMT the rand was 0.61% firmer at 12.6200 per dollar from a close of 12.7025 overnight in New York, regaining some ground following a selloff of emerging currencies on Tuesday that pushed the unit as far as 12.7425.

The dollar index was down 0.17%.

The relative strength index and short-term moving average both suggested the rand had strayed into oversold territory, prompting some traders to buy the dip with a view of booking profits near the May 21 low of 12.8950.

Volumes were high at the 12.6300 mark.

Gross domestic product revisions for the first quarter from the United States is the main risk event, with the figure expected to support the market view of an expanding economy, possibly re-igniting emerging market outflows.

Bonds were weaker in early trade, with the yield on the 2026 benchmark paper up 2 basis points to 8.55%.

Stocks opened weaker, with the Johannesburg Stock Exchange’s Top-40 up 0.1% to 49,573 points.