South Africa’s rand weakened in early trade on Wednesday, as COVID-19 vaccine trial halts and lack of an agreement on additional U.S. fiscal stimulus prompted traders to shift to safer assets.
At 0630 GMT, the rand ZAR=D3 traded at 16.5050 versus the U.S. dollar, 0.2% weaker than its previous close.
“Question marks around a COVID-19 vaccine and U.S. stimulus remain, as both seem to be stalling,” said Bianca Botes, executive director at Peregrine Treasury Solutions.
Risk appetite waned after Johnson & Johnson JNJ.N said on Tuesday it is pausing a clinical trial of a coronavirus vaccine and Eli Lilly (NYSE:LLY) and Co LLY.N also said later in the day that it paused a coronavirus antibody treatment. was also marred by fading hopes of U.S. Republicans and Democrats reaching a compromise on a new round of fiscal stimulus, which would deal a blow to the economic outlook.
Traders also await South African President Cyril Ramaphosa’s unveiling of an economic recovery plan on Thursday, ahead of the finance minister’s Medium Term Budget Policy Statement on Oct. 28.
The budget statement was initially due on Oct. 21, but the Treasury requested for a postponement by a week, citing implications of the time frames for the finalisation of the government’s economic recovery plan on the budget process. fixed income, and the yield on the benchmark government bond due in 2030 ZAR2030= was up 0.5 basis point to 9.42% – reflecting weaker prices.