June 3, 2020 / 6:53 AM / a month ago

South Africa's rand strengthens to 11-week high versus dollar

JOHANNESBURG, June 3 (Reuters) - South Africa’s rand traded at its strongest in 11 weeks against the U.S. dollar in early trade on Wednesday, as investor appetite for riskier assets improved on prospects of a swift global economic rebound.

At 0640 GMT, the rand traded at 17.0880 per dollar, 0.49% firmer than its previous close, and at its strongest levels since March 19.

“The rand managed to break below the key level of R17.30/$ and is now setting its sights on moving another leg stronger which could see the unit trade below R17.00,” Bianca Botes, executive director at Peregrine Treasury Solutions in Pretoria, wrote in a client note.

“The risk rally witnessed across the board has been fuelled mostly by optimism surrounding an uptick in economic activity around the world, supported by massive stimulus packages.”

Governments and central banks around the world have unleashed unprecedented fiscal and monetary stimulus and other support for economies floored by the coronavirus pandemic.

Government bonds also firmed, with the yield on the 10-year instrument down a single basis point to 8.725% in early trade. (Reporting by Olivia Kumwenda-Mtambo, Editing by Sherry Jacob-Phillips)

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