Rand recovers from three-week low, remains vulnerable

The rand halted its slide against the dollar early on Friday, as worries a recovery in the US economy would be hampered by the country’s struggle to stem the coronavirus epidemic weakened the US currency.

At 0705 GMT, the rand traded at R16.74 per dollar, near is close of R16.75 on Thursday, when it plunged more than 2%.

“As the world continues to grapple with the effects of the coronavirus pandemic, the US economy is showing its largest contraction on record,” analysts at Nedbank wrote in a note.

“The rand has recovered from the highs posted yesterday, although it appears to remain vulnerable. Markets are likely to be cautious going into the weekend, and liquidity is likely to be tested.”

South Africa’s climbing coronavirus cases, at over 482,000, have also hurt market sentiment.

In fixed income, the yield on the benchmark government bond due in 2030 was down one basis point to 9.285%.