The rand rallied to its firmest in more than a month on Wednesday as risk-taking globally was further boosted by hopes of a breakthrough in stimulus talks in the United States.
At 1515 GMT the rand was 1.09% firmer at R16.30 per dollar from an opening level of R16.47. The unit touched a session-best of R16.25, its best level since September 17, bringing gains since last Wednesday to nearly 3%.
“Movements are more a matter of dollar weakness rather than rand strength as markets look to the prospect of US stimulus for short-term guidance. Around $2 trillion in Covid-19 relief funds now seem more a matter of ‘when’ rather than ‘if’,” said Shaun Murison, senior analyst at IG Markets.
The White House and Democrats in the US Congress edged closer to agreement on a new coronavirus-related relief package on Tuesday with President Donald Trump saying he was willing to accept a large aid bill despite opposition within his own Republican Party.
The main index of the Johannesburg Stock Exchange slipped sharply after opening but gained all the lost ground to close in the green as hopes of the US economic aid package and higher commodity prices gave strength.
The benchmark all-share index was marginally up by 0.13% to 55,345 points, while the blue chip top 40 companies index closed up 0.11% to 50,905 points.
Banks and gold mining companies lent support to the indices with the bank index closing up 3.3% and the gold mining index 2.5% on a boost to gold prices.
Diversified miner Sibanye Stillwater was the biggest gainer and ended the day up over 10%.
Bonds were slightly weaker, with the yield on the benchmark 2030 government issue up 1 basis point to 9.295%.