South Africa's rand steady as selloff eases ahead of weekend

JOHANNESBURG: South Africa's rand firmed early on Friday as a sell-off in emerging markets eased, with investors taking profits from the dollar's recent rally to two-month highs.

At 0615 GMT the rand was 0.18pc firmer at 16.9100 per dollar, following a close of 16.9400 overnight in New York in low volume trade with local markets closed for a national holiday.

After rallying to a six-month best of 16.0950 last Friday, the rand has seen massive reversal, along with other risk assets, weakening more than 6pc as fears a of second wave of COVID-19 infections in Europe rattled investor sentiment.

"Another driver of this week's risk-off frenzy has been the realisation that the Fed stimulus the market has become so accustomed to in recent months will eventually reach an end," said economists at ETM Analytics.

But on Friday the greenback had stalled after jobless claims rose more than expected, in a sign the economic recovery was running out of steam as coronavirus infections and deaths continue to climb.

Bonds inched weaker, with the yield on the benchmark 2030 government issue up 1 basis point to 9.50pc.