Market News
South African rand claws back losses as risk sentiment improves - REUTERS
BY Tannur Anders
JOHANNESBURG (Reuters) - The South African rand clawed back ground in early trade on Tuesday as risk sentiment improved, after tanking on Monday on fears of a possible recession in the United States.
At 0649 GMT, the rand traded at 18.45 against the dollar, about 0.4% firmer than its previous close.
Friday's weak U.S. July payrolls report stoked recession worries and led to a plunge in global equities, with traders fleeing to safe havens.
"The rand opened below the R18.50 handle this morning after risk sentiment improved in the early morning hours," said Andre Cilliers, currency strategist at TreasuryONE.
"We will still take our cues from global risk sentiment and could expect volatility to remain for the days to come," Cilliers added.
U.S. central bank policymakers pushed back on Monday against the notion that the economy is close to recession, but indicated the Federal Reserve will need to cut rates to avoid such an outcome.
Like other risk-sensitive currencies, the rand often takes cues from global drivers such as U.S. economic data and monetary policy in addition to local factors.
South Africa's benchmark 2030 government bond was also firmer in early deals, with the yield down 3.5 basis points to 9.325%.
(Reporting by Tannur Anders; Editing by Christina Fincher)
