Rand remains firmer in robust trade despite impressive US GDP growth

Analysts said most of the good news was already priced into the market, with a slightly softer tone by the European Central Bank (ECB) on Thursday resulting in the euro retreating below the $1.1650 level.

The acceleration of eurozone inflation and the ECB’s promise to keep rates unchanged until late 2019, reduces the real (minus inflation) return on investments into European assets, FxPro analysts said. “This soft ECB position caused a new wave of pressure on the common currency and European bonds.”

The pound continued to fall after the EU rejected a key part of a trade deal proposed by UK Prime Minister Theresa May.

The rand has benefited from signs of easing global tension on trade, with the US and the EU having agreed earlier in the week to explore talks to find a solution to their tariff spat.

On Tuesday, China pledged to invest $14.7bn in SA, which also provided the rand with some support.

At 3pm the rand was 0.23% stronger against the dollar at R13.2149 from R13.2452. It was at R15.3792 to the euro from R15.4168, and at R17.316 to the pound from R17.3640.

The euro was at $1.1638 from $1.1642 and the pound at $1.3104 from $1.311.

South African bonds were firmer, with the yield on the benchmark R186 at 8.58%, from a previous 8.61% and the R207 at 7.37% from 7.395%.

The US 10-year treasury was last seen at 2.9566% from 2.9788%.