Rand firms as investors await next bout of weakness

South Africa’s rand was firmer early on Friday, adding to the previous session’s gains in a recovery driven mainly by investors covering their short positions in anticipation of sharper falls as local and global growth fears loom.

At 0650 GMT the rand was 0.57% firmer at 15.19 per dollar compared with a close of 15.28 overnight in New York, bringing gains to more than 1.5% since Wednesday when the currency tumbled to just short of 11-month lows.

The rand has fallen more than 9% since the beginning of August, pressured by the rising likelihood of a credit ratings downgrade by linked to massive, additional bailout to state power firm Eskom and, this week, by signs of a slower global growth.

With fundamentals and sentiment pointing to further rand weakness, many traders see a short term rally, with buyers coming in at current prices before the next tranche of losses.

Bonds also firmed, with the yield on the benchmark 10-year government paper due in 2026 down 4 basis points to 8.395%.

In stocks, petrochemical giant Sasol said it would delay the release of its 2019 financial results due to possible “control weaknesses” at its US ethane cracker project.

Read: Sasol delays results due to US project glitch

Shares in Sasol fell 15% at market open at 0700 GMT.