Rand claws back some ground
South Africa’s rand climbs against the dollar in early trade on Wednesday.
|||Johannesburg - South Africa's rand climbed as much as 1.5 percent against the dollar on Wednesday, mainly reflecting a recovery in global risk appetite after better-than-expected Chinese trade data.
The rand remains hostage to worries about the ailing local economy, which is beset by a crippling drought and uncertainty over fiscal policy after a bungled cabinet reshuffle in December.
The rand briefly touched a session high of 16.4200 to the greenback in early Johannesburg trade and was 1.14 percent firmer at 16.4800 by 06h45 GMT compared with Tuesday's close.
Stocks were also set to open slightly firmer at 07h00 GMT, with the JSE securities exchange's Top 40 futures index adding 0.26 percent.
This was in line with Asian shares which made their first real rally of the year on Wednesday after Chinese trade data beat expectations, offering a rare chink of light for the global economy.
The rand has had a bumpy start to the year, tumbling on Monday as much as 9 percent to a record 17.9950 on technical short-selling in volatile Asian trade.
“Local sentiment has recovered somewhat from the shock of Monday. This has allowed for some rand gains but caution is still high and liquidity still slightly constrained,” Rand Merchant Bank currency analyst John Cairns said.
“The 'flash crash' damage is still evident in wider bid-offer spreads, most importantly in the spot market but more accentuated in the derivative space.”
On the debt market, the yield for the benchmark government bond maturing in 2026 added 5 basis points to 9.615 percent from Tuesday's closing level.
REUTERS