South Africa’s rand ended mostly flat on Tuesday in turbulent trade as investors awaited the results from the United States presidential election, with Joe Biden’s consistent lead in opinion polls dragging the dollar to the benefit of risk assets.
At 1515 GMT the rand ZAR=D3 was 0.05% firmer at 16.0225, having rallied as much as 1% during Asian trading to reach a session best of 16.0175, its strongest since early March before the COVID-19 pandemic struck locally.
The currency has brushed off last week’s dismal budget speech where the treasury forecast a larger budget deficit, slower consolidation of debt and a weaker economic growth.
Yield-hungry investors have kept faith in the currency, with one eye on the U.S. elections, where a victory for the Democratic Party’s Biden over Donald Trump is seen triggering more expansive fiscal and monetary policy.
Election polls show U.S. President Donald Trump closely trailing Biden, but the race remains close in several battleground states.
Bonds also gained, with the yield on the benchmark government bond due in 2030 ZAR2030= down up 5.5 basis point to 9.32%.
Stocks rose too, led by banking shares which tend to benefit from a stronger rand.
The Johannesburg Stock Exchange’s blue-chip Top-40 Index .JTOPI closed 0.95% higher at 48,853 points, while the broader All-Share Index .JALSH was up 1.08% to 53,188 points.
The exchange’s banking index .JBANK ended the day 4.82% higher, with the only losers on the blue-chip index being e-commerce giant Naspers NPNnJ.J and its subsidiary Prosus PRX.AX, whose main listing is in Amsterdam.
Both fell over 4% after China suspended Ant Group’s $37 billion stock market listing. The news knocked Prosus because it holds an around 30% stake in Chinese tech giant Tencent 0700.HK.
– Reuters