Rand strengthens in early trade as dollar on back foot

The rand strengthened in early trade on Tuesday, as the dollar fell on global markets and appetite for risk was boosted by policy moves in China.

At 10:57, the rand traded at R17.22 against the dollar.

With no major South African economic data releases expected on Tuesday, traders were looking to US producer price index data later in the day for more indications about the Federal Reserve’s pace of rate hikes.

The dollar index, which tracks the US currency against a basket of others, was down more than 0.6%.

Some Chinese cities have begun cutting routine community testing, days after China announced an easing of some of its coronavirus measures. And Beijing has announced support measures aimed at boosting liquidity in the property sector, a pillar of the world’s second-largest economy.

Those moves drove a bounce in Asian stock markets on Tuesday.

On the Johannesburg Stock Exchange, the Top 40 index was up about 0.9%. The government’s benchmark 2030 bond was slightly stronger in early deals, with the yield down 2 basis points at 10.185%.