RAND AND BOURSE STRONGER

THE RAND edged up yesterday as global risk appetite improved on hopes of an economic recovery, although investors remained cautious a day ahead of a central bank rate decision.

Stocks continued their upward trajectory, following other global markets on renewed optimism of economies opening up and increasing demand.

At 5pm, the rand was 2.15 percent firmer at R17.95 to the dollar, trading at its strongest levels since April 10.

“Markets are relatively at ease given the continuous stimulus in the EU and US to support their economies through the pandemic and the subsequent recession,” Bianca Botes, executive director at Peregrine Treasury Solutions, said in a note.

The rand’s strength mirrored gains in the euro, which climbed towards a two-week high as a Franco-German proposal for a common fund that could move Europe closer to a fiscal union boosted demand for the currency.

Back at home, investors were waiting for the SA Reserve Bank (SARB) interest rates decision today.

A Reuters poll of analysts forecast the SARB to cut rates by 50 basis points (bps) to 3.75 percent, but some see the possibility of a deeper, 100 bps cut. That is on top of 225 bps-worth of rate reductions since March.

On the stock market, the JSE all share index gained 0.37 percent to 52142.75 points, a 10-week high, while the Top40 index rose 0.46 percent to 48379.91 points.

Government bonds firmed, with the yield on the 10-year instrument due in 2030 falling 23 basis points to 8.98 percent.

Meanwhile, emerging stock markets were mixed. Chinese mainland stocks fell 0.5 percent, while optimism about stimulus measures lifted indices in South Korea and India. I Reuters