South Africa’s rand steadied against the dollar in late afternoon trade on Tuesday as traders awaited US President Donald Trump’s State of the Union address which could hint at progress in US-China trade talks.
At 1527 GMT, the rand was at R13.43 per dollar, not far off its close of R13.42 on Monday.
The currency had earlier in the day touched a session best of R13.34, as hopes for progress in the US-China trade dispute fuelled a recovery in investors’ appetite for risk taking, before giving up the gains in late trade.
After racing to a six-month high of R13.23 last Thursday after the USFederal Reserve’s caution boosted risk appetite, the rand has since eased as investors locked in gains and awaited the next driving force on the index.
“With no major local economic data releases scheduled for the next couple of days, we expect the local currency to remain rangebound,” said Jee-A van der Linde, an economist at NKC African Economics.
“Markets will turn to politics for direction,” he added.
Investors shifted their focus to President Donald Trump’s State of the Union address at 0200 GMT on Wednesday.
South African focused investors are also waiting for President Cyril Ramaphosa’s state of the nation address on Thursday, where he is expected to give an update on the economy and plans to shore up cash-strapped state companies.
Government bonds closed firmer, with the yield on the benchmark 10-year bond down 5 basis points to 8.59%.
Stocks recovered after a difficult trading period on Monday, with the Johannesburg Stock Exchange’s Top 40 index up 1.73% to 47,999 points, and the broader all-share index up 1.53% to 54,209 points.
The consumer-facing firms that stocked the bottom of the index on Monday also rebounded, aside from Standard Bank , which was the only faller on the blue-chip index, down 0.79%.
The all-share index was led upwards by paper and plastics packaging maker Mpact, which issued a trading statement predicting significantly higher underlying earnings per share for the year to December 2018, lifting its shares by over 12%.