South Africa’s rand opened higher on Friday, as hopes for U.S. stimulus spending lifted sentiment globally, encouraging investors to buy riskier assets in emerging markets.
At 0640 GMT, the rand ZAR=D3 traded at 16.5225 against the U.S. dollar, 0.4% stronger than its previous close.
The expectations for stimulus in the world’s largest economy have provided a welcome boost for the rand by weakening the dollar .DXY and boosting appetite for risk-sensitive currencies. economic data continue to paint a picture of a weak recovery from a deep coronavirus-induced slump.
Investor attention will soon turn to Finance Minister Tito Mboweni’s mid-term budget statement, which is expected later this month and will be scrutinised for signs the government will deliver on promised expenditure cuts.
In an emergency coronavirus budget in June, Mboweni warned that rising debt was like a hippo “eating our children’s inheritance”. bonds rose slightly in early deals on Friday, as the yield on the 2030 instrument ZAR2030= fell 3 basis points to 9.505%.