South Africa’s rand steadied in early trade on Friday but was on track to clock weekly gains as optimism about a new stimulus package in the United States boosted risk taking.
At 0600 GMT, the rand ZAR=D3 traded at 16.2450 versus the U.S. dollar, not far off its previous close of 16.2350.
The currency, which rallied to its best in a month on Thursday, looked set for weekly gains of more than 1.5%.
Hopes for a new U.S. coronavirus relief package ahead of the Nov. 3 presidential election remain up in the air, but optimism that they will soon be concluded has kept high yielding currencies bid with investors scouring the global market for returns.
Local focus is on the medium term budget speech due on Wednesday, when the extent of the country’s fiscal problems should become clearer.
A Reuters poll showed that South Africa’s consolidated fiscal deficit was set to widen further than projected in June’s emergency COVID-19 budget as a third-quarter rebound in economic growth will not boost tax receipts enough.