South Africa’s rand firmed in early trade on Tuesday, as upbeat Chinese factory data and positive developments about a COVID-19 vaccine boosted buying of riskier and higher yielding assets, recovering from a bout of profit-taking in the previous session.
At 0620 GMT, the rand ZAR=D3 traded 0.6% firmer at 15.3825 against the U.S. dollar, after sliding around 1% on Monday as investors continued to take profits from last week’s rally, while mixed domestic economic data also kept the currency on the back foot. on Tuesday showed China’s factory activity accelerated at the fastest pace in a decade in November, helping factories across the region to steadily recover from the COVID-19 crisis. on a coronavirus vaccine also prompted investors to snap up riskier assets, after U.S. pharmaceutical company Moderna MRNA.O said on Monday it had applied for U.S. emergency authorisation for its COVID-19 vaccine and would also seek European approval for the treatment. now await U.S. Federal Chair Jerome Powell congressional testimony for clues on stimulus and the economy, said Bianca Botes, executive director at Peregrine Treasury Solutions.
In fixed income, the yield on the benchmark government bond due in 2030 ZAR2030= was up 0.5 basis point to 8.995%.