South Africa’s rand firmed to a two-week best on Friday as emerging markets were boosted by increased expectations of the United States central bank cutting lending rates this year.
At 0810 GMT the rand was 1.1 percent firmer at 14.1500 after an overnight close of 14.3075.
With little on the local data front in the first week of the new year, the rand looked to offshore events for direction, and has seen volatile trade with swings in the dollar setting the tone.
Survey data on Thursday showed U.S. factory activity slowed more than expected, the latest sign the world’s largest economy was losing steam, igniting bets the Federal Reserve could switch from raising to cutting rates before the end of the year.
That aided the rand recovery from Wednesday’s “flash crash” that saw the unit plunge to a three-month low in a global selloff.
Progress in trade talks between Washington and Beijing also soothed sentiment. The two superpowers are due to hold trade talks in China next week.
Bonds opened firmer, with yield on the benchmark paper due in 2026 down 5.5 basis points to 8.795 percent, its lowest since mid-August.
Stocks edged up, with the Johannesburg Stock Exchange’s Top-40 index up 0.24 percent at 45,734 points.
Source: af.reuters.com