Rand retreats as virus worries dent rally

South Africa‘s rand weakened early on Wednesday, pausing a recent rally with risk sentiment souring as hopes that the coronavirus crisis in Europe and New York was slowing dimmed.

At 0630 GMT the rand was 0.37% weaker at R18.38, climbing down from Tuesday’s five-session peak in a rally that saw the unit trade at a session-best R18.08.

But by Wednesday those hopes had receded as investors contemplated the cost of reviving economies decimated by the coronavirus. A Reuters tally puts global infections at 1.4 million with 81 451 coronavirus-related deaths.

“The positive sentiment that prevailed in markets for most of yesterday dissipated late in New York. The slowing rate of spread of the coronavirus was tempered by the rising number of deaths which turned markets cautious,” said Andre Botha, a senior dealer at TreasuryONE.

Bonds also opened weaker, with the yield on the government issue due in 2030 adding 7.5 basis points to 11.03%.