Rand firms on improved risk appetite

The rand started the week firmer on Monday as appetite for risk was supported by hopes of a US fiscal package and expectations of a coronavirus vaccine by the end of this year and data showing China’s economy rebounding.

At 0630 GMT, the rand traded at 16.51 versus the dollar, 0.23% firmer than its close on Friday.

“The foreign exchange markets continue to trade at the mercy of headlines,” Nedbank analysts said in a note. “This time, the global focus is on the ongoing stimulus package talks from the US and the second wave of Covid-19 infections, the measures being implemented and the possibility of a vaccine.”

A rally in risk assets was buoyed by hopes of a coronavirus vaccine after drugmaker Pfizer said on Friday it could have a coronavirus vaccine ready in the United States by the end of this year.

China’s rebound from the Covid-19 pandemic stayed on course last quarter as gross domestic product (GDP) grew 4.9%, although the weaker-than-expected headline growth suggested risks persisted.

Government bonds were firmer in early deals, and the yield on the instrument due in 2030 fell 3.5 basis points to 9.31%.