The rand was slightly firmer on Friday morning, as global risk assets made a recovery, albeit a cautious one.
International equity markets and the rand saw sharp sell-offs on Thursday due to market jitters about the US-China trade war as well as concerns about slowing global growth.
US President Donald Trump, however, on Thursday indicated that a deal could be reached soon, saying that it could include some concessions regarding the blacklisting of Huawei.
Although this provided some optimism, China was unlikely to compromise without further concessions, and the conflict looked to be escalating, said Barclays Research analyst Jian Chang in a note. Certain non-tariff responses, such as export restrictions on rare earth elements, now seem to be options that previously seemed unlikely.
At 9.30am on Friday the rand was 0.48% stronger at R14.4196/$, 0.39% firmer to R16.1394/€, and 0.42% up at R18.2699/£. The euro was flat at $1.1192.
The benchmark R186 government bond had strengthened, with the yield dropping four basis points to 8.35%. Bond yields move inversely to bond prices.
The rand had pushed past R14.50/$ and reached its weakest level in two weeks on Thursday, extending losses after the Reserve Bank signalled that its next move could be an interest rate cut.
Analysts, however, said international factors were primarily driving the market. Items on the agenda on Friday and at the weekend include a possible resignation by UK Prime Minister Theresa May and European parliamentary elections, which could see increased support for populist and eurosceptic parties.
President Cyril Ramaphosa’s cabinet announcement on Sunday or Monday is also being watched.