Rand steady, US stimulus in focus

The rand was largely steady in early trade on Tuesday as investors eyed political developments in the United States, while local focus was on the government’s economic recovery plan later in the week.

At 0620 GMT, the rand traded at R16.52 versus the US dollar.

President Cyril Ramaphosa is expected to address parliament about the recovery plan on Thursday.

“Investors are mainly going to be interested in whether the urgently required structural reforms are making progress,” Commerzbank emerging market analyst Elisabeth Andreae said in a note.

“So far the government had never got further than announcing measures – as a result we are sceptical that it will manage a big hit this time round.”

In fixed income, the yield on the benchmark government bond due in 2030 was up 0.5 basis point to 9.44%.

Globally, risk sentiment has been propped up by hopes that former US Vice President Joe Biden will beat President Donald Trump in the November 3 US election and push forward with a large stimulus to shore up a pandemic-hit economy.