Rand steady as global risk appetite fades

The rand was little changed early on Tuesday, struggling for momentum as investors awaited local and offshore developments before making any big bets as last week’s risk-on sentiment faded.

At 0700 GMT the rand was 0.02% firmer at 14.13 per dollar.

The rand had gained strongly in the previous month along with other emerging assets as the greenback slumped over the likelihood of lower US lending rates, but the dollar has bounced back.

“Although the rand has continued to trade steadily over the most recent sessions, it has as yet failed to breach sub-14.00, and with little by way of local news to provide support, it has retreated from its best levels,” analysts at Nedbank said.

A trade truce between the United States and China on the sidelines of the G20 summit over the weekend has calmed fears and boosted the dollar, but negotiations are ongoing, with the uncertainty curbing risk-taking by investors.

“The markets remain at the mercy of any headlines regarding the resumption of trade talks between the US and China,” the analysts said in a note.

Bonds were weaker, with the yield on the benchmark 10-year government issue adding 2.5 basis points to 8.15%.