South African rand flat as local virus resurgence offsets global optimism

JOHANNESBURG: South Africa's rand was little changed in early trade on Thursday, as improving global market sentiment was offset by a quickly worsening fresh coronavirus wave at home.

At 0527 GMT, the rand was at 14.6000 against the US dollar, trading 0.02% stronger than its previous close in thin trading ahead of holidays.

Asian stock markets, however, were buoyed by optimism around a trade deal between Britain and the European Union, pushing investors to place bets on the prospects of a global recovery.

While positive global sentiment usually drives even riskier assets like the rand higher, investors also had to weigh two local pandemic-related announcements made late Wednesday.

The health ministry reported the highest-ever daily increase in coronavirus cases, and warned that South Africa's second wave was progressing much faster and would surpass the peak of its first wave within days. It would consider fresh restrictions, the ministry said.

Britain also joined a number of other nations in imposing travel restrictions on the country, after it found two cases of another new variant of the coronavirus linked to South Africa.

Numerous countries had already enforced travel bans on Britain after it identified a separate new variant, also thought to be more infectious than those currently circulating, in the country.

Government bonds were flat, with the yield on the instrument due in 2030 at 8.755%.