Rand firmer as Turkey boosts emerging markets

The rand firmed against a softer dollar early on Friday, with investor appetite towards emerging markets lifted by renewed moves by Washington and Beijing to tackle their trade dispute and a rate hike in crisis-hit Turkey.

At 0645 GMT the rand was 0.56% stronger at 14.70 per dollar compared to a close of 14.78 in New York.

The Turkish lira firmed 0.95% a day after the central bank raised its benchmark rate by 625 basis points.

Read: Turkish lira eases after hefty central bank rate hike

The move in Turkey halted a deep selloff in the lira that had dragged down other emerging market currencies as risk demand wilted on fears of contagion.

Risk appetite was also soothed by Chinese officials welcoming an invitation from United States Treasury Secretary Steven Mnuchin for new trade talks.

Moody’s comment at a conference in Johannesburg on Thursday that it was unlikely to cut Pretoria’s foreign debt to non-investment grade, despite last week’s surprise slide into recession, has also supported the rand.

Bonds were firmer, with the yield on the benchmark paper due in 2026 falling 3.5 basis points to 9.085%.

Stocks were set to open higher at 0700 GMT, with the JSE securities exchange’s Top 40 Futures index up 0.5%.