March 13, 2020 / 7:27 AM / 23 days ago

South Africa's rand steady as coronavirus-induced sell-off pauses

JOHANNESBURG, March 13 (Reuters) - South Africa’s rand held steady in early trade on Friday as a pause in the global selloff of risk assets, triggered by panic over the coronavirus and tumbling oil prices, gave investors a chance to reassess positions ahead of the weekend.

As of 0645 GMT, the rand was 0.69% firmer at 16.4500 per dollar, compared with Thursday’s session-low of 16.6150.

The mood in financial markets improved somewhat on Friday, with Asian equities staging a recovery and U.S. stocks futures pointing to a firmer start on Wall Street as attention turned to a U.S. stimulus package.

The turnaround came after assets across the developed and emerging markets saw record sell-offs on Thursday as investors scrambled for safe-havens even after the European Central Bank announced stimulus measures to fight the economic fallout from the coronavirus outbreak.

Locally, stocks recorded their worst single-day fall in more than 22-years in the previous session, bonds saw their biggest selloff on record, and the rand hovered around the 16.50 mark, a level seen as a bearish technical gauge, especially with dollar back in vogue.

The U.S. Federal Reserve’s move to pump $1.5 trillion of liquidity into the banking system quickened the flight to the greenback, but Friday was likely to see some profit-taking, traders said.

“The rand has managed to make back some modest ground in early trade. Whether or not this can be sustained will depend on how risk conditions hold up as the markets remain fixated on coronavirus headlines,” economists at ETM Analytics said in a note.

Bonds remained on the ropes with the yield on the government issued 2030 paper up 6 basis points at 9.855%. (Reporting by Mfuneko Toyana; Editing by Aditya Soni)

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