JOHANNESBURG: South Africa’s rand firmed in early trade on Wednesday, holding on to gains from the previous session as signs of progress in Russia-Ukraine peace talks lifted risk appetite.

At 0625 GMT, the rand traded at around 14.4880 against the dollar, 0.3% firmer than Tuesday’s close, and trading close to a five-month high hit on Friday.

Negotiators from Russia and Ukraine met in Turkey late on Tuesday to discuss a peace deal, where Russia promised to scale down military operations around Kyiv and another city, and Ukraine proposed adopting a neutral status.

South Africa’s rand pulls back as dollar firms

This supported riskier but high-yielding emerging market assets including the rand and dragged on the dollar as investors felt less in need of a safe-haven.

“The rand this morning is again trading in positive territory despite disappointing local unemployment data,” Nedbank analysts said in a note.

Data showed on Tuesday that South Africa’s unemployment rate rose to a new record high of 35.3% in the fourth quarter of 2021 as sectors like manufacturing and construction shed jobs.

Government bonds also firmed, with the yield on the benchmark 2030 maturity down 3 basis points to 9.475%.