The rand touched a five-month high early on Monday, as demand for emerging market currencies was aided by easing trade tensions between China and the United States and investors looking for high yields.
By 0620 GMT, the rand was 0.32% firmer at R13.9950 per dollar, compared with Friday’s close of R14.0400 in New York. The currency was at its strongest level since 31 July 2019.
China’s commerce ministry said on Sunday it has “proactively dealt with” trade frictions with the United States this year and that it is in close touch with the US on signing the trade deal.
The rand has gained about 5% since mid-December, despite a raft of data releases showing a weak economy and nationwide blackouts by state power firm Eskom, with investors willing to overlook the negatives and pocket the high yield.
The rally has seen the unit hurdle key technical resistance points, first at R14.40 and then R14.20, spurring demand to the R14.00 psychological level that could trigger even more gains as investors look to close position and lock-in gains.
Bonds were flat, with the yield on the benchmark 2026 government issue up 0.5 basis points to 8.17%.
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