Rand set for weekly gain

The rand strengthened on Friday and was headed for a weekly gain of more than 1% against the U.S. dollar, as the standoff between the West and Russia over Ukraine boosted appetite for key export gold.

At 09:10, the rand traded at 14.9650 against the dollar, around 0.4% stronger than its previous close and up 1.7% on its closing level last week.

Gold prices were set for a third straight weekly gain, with spot gold rising 1.6% since the end of last week as investors rushed to the safety of bullion after Ukraine tensions heightened.

“Periods of risk-off are driving up gold prices and, in turn, South Africa’s terms of trade,” ETM Analytics said in a research note.

They added there was tentative optimism over next week’s 2022 budget, due on Feb. 23, which was contributing to the country’s appeal as an investable emerging market.

Also supporting rand assets, the South African Reserve Bank is expected to hike its main lending rate by another 25 basis points next month, extending a tightening cycle, a Reuters poll showed.

The government’s benchmark 2030 bond was slightly firmer, with the yield falling 2.5 basis point to 9.045%.

The government will sell inflation-linked bonds and Treasury bills later on Friday.