Rand falls as virus surge weighs on risk appetite

The rand eased early on Tuesday as concerns about rising Covid-19 cases and stricter lockdowns globally outweighed optimism over the roll-out of coronavirus vaccinations.

At 0602 GMT, the rand traded at R15.05 against the US dollar, 0.22% weaker than its previous close.

The currency benefited from improved risk appetite on Monday following progress on the roll-out of a Covid-19 vaccine.

However, concerns have deepened about the economic impact of new restrictions at home and elsewhere, with South Africa’s government saying on Monday that beaches on the eastern coast would be closed down and public gatherings would be limited ahead of the festive season.

The move was aimed at controlling a spike in the country’s coronavirus infections since the start of December, with reported cases hovering around 8,000 per day in the last few days, from around 3,000 in November.

Meanwhile, the number of US Covid-19 deaths crossed 300,000 as the hardest-hit nation started its first vaccine inoculations, while tighter Covid-19 restrictions were imposed in London.

In fixed income, the yield on the 10-year government bond was up 0.5 basis point to 8.795 % in early deals.