South Africa’s rand firmed on Monday, extending last week’s gains as global risk appetite increased following signs US President Donald Trump’s health has improved.
Trump’s positive coronavirus test last week rattled global financial markets ahead of the November 3 presidential election.
At 1500 GMT, the rand traded at R16.47 against the US dollar, 0.41% above its previous close and extending gains into a sixth session.
“The rand is always impacted by the global financial markets, and the strength today must not be misconstrued as occurring from any improvement in South Africa’s fundamentals, but rather better sentiment on global recovery factors, and so better prospects for global recovery,” said Annabel Bishop, chief economist at Investec.
After steep losses during the onset of the Covid-19 pandemic, the rand has regained levels last seen in March when South Africa implemented a strict lockdown that curbed economic activity. Aftershocks continue to be felt in the economy, which was already weak before the pandemic.
South Africa’s private sector activity registered a softer decline in September on easing lockdown restrictions, data showed on Monday. The reading was a few points shy of a level that indicates growth.
Positive sentiment also boosted the Johannesburg Stock Exchange (JSE), pushing it higher for a third consecutive session.
The benchmark FTSE/JSE all-share index was up 0.75% to end at 54,628 points while the bluechip FTSE/JSE top 40 companies index closed up 0.79% to end at 50,290 points.
The day’s biggest gainer was Africa’s largest pay-TV company Multichoice Group, which advanced by over 9% on news that French media giant Canal Plus has increased its stake in the company to 6.5%.
Government bonds weakened, with the yield on the 2030 instrument up 6.5 basis points to 9.495%.