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Rand firms as US stimulus hopes boost risk taking

In early trade the rand was at R16.45 versus the dollar, 0.14% firmer than its previous close.
Image: Shutterstock

The rand firmed in early trade on Wednesday as investors who are optimistic that US lawmakers could reach agreement on a pre-election coronavirus relief package sought out riskier currencies.

At 0610 GMT, the rand traded at R16.45 versus the dollar, 0.14% firmer than its previous close.

“Some renewed optimism made its way to markets, as US lawmakers continued to negotiate the relief package, with emerging markets gaining on the hopes,” Bianca Botes, executive director at Peregrine Treasury Solutions, said in a note.

“The rand managed to win some ground, making its way to R16.42/$, however R16.40 remains a resilient technical level.”

US President Donald Trump has raised hopes for a stimulus breakthrough, saying he was willing to accept a large aid bill, despite opposition from his own Republican Party.

With no top-tier data due locally this week, the rand has continued to be driven by global risk sentiment.

South Africa’s currency and bonds offer some of the highest returns among emerging markets, and have remained attractive despite a frail economy and mounting fiscal risks.

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Incorrect news again-The Rand did not firm-the dollar weakened as evidenced by the ZAR weakening against the Euro.

The US is cunningly weakening its currency to print its way out of debt and being the only reserve currency can get away with this

End of comments.

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