The rand was firmer on Wednesday, in line with most emerging-market currencies, as sentiment towards the asset class improves.
“In recent days, we have seen an improving sentiment towards many emerging markets. The fragile countries that have massively excessive government debt levels (SA, Brazil, Turkey, etc) have been lagging,” said Anchor co-chief investment officer Nolan Wapenaar.
“It seems that the positive sentiment has, for now, caught up with these countries as well, though their government finances remain precarious and the positive sentiment is likely to be fickle in the near term,” said Wapenaar.
He said the rand is still trading substantially weaker then its fair value of R15/$ and “we think there is a reasonable prospect of much more recovery further down the line”.
The rand reached an intra-day best of R17.962/$ against the dollar, according to Infront data. At 12.55pm, it had strengthened 1.72% to R18.0153/$, 1.4% to R19.7239/€ and 1.54% to R22.0918/£.
The rand has gained more than 3.5% against the dollar so far this week.
The yield on the R2030 government bond had fallen 22.5 basis points to 8.98%. Bond yields move inversely to prices.
The euro was up 0.36% to $1.0958, with the dollar weakening after US President Donald Trump promised to open the US economy with or without a vaccine, fueling concern of a second wave of infections that could damage both the US economy and stock markets globally.