Africa-Press – South-Africa. JOHANNESBURG – The rand was bolstered by US stimulus optimism, which fuelled risk appetite and lifted commodity currencies according to NKC Research.
The greenback traded near a two-week low as demand for riskier assets improved, with traders looking ahead to an expected global economy recovery in 2021.
The recent bout of resilience demonstrated by commodity prices, which partially reflects underlying trade and industrial recovery, supports a favouring of emerging market local-currency bonds – South African Government Bonds in particular are expected to benefit.
A frail domestic backdrop aside – including setbacks to the inoculation programme and ongoing power supply disruptions – the policy-led softening in the US dollar will strengthen the rand’s carry appeal.
At the close of local trade, the rand quoted 0.68 percent stronger at R14.79/$, after trading in range of R14.76/$ – R14.94/$. The rand traded firmer overnight, reaching its best level since early January. Expected range today R14.60/$ – R14.90/$.
South African bourse
The JSE All Share (+0.16 percent) ended higher yesterday, led by gains in large financial (+0.51 percent) and industrial (+0.64 percent) stocks. In the overall emerging market sphere, the MSCI Emerging Market Index (+0.48 percent) traded higher.
January saw a modest pull back in global equity valuations and they may remain under pressure in the near term. However, we believe that equity returns are ultimately underpinned by a strong earnings recovery. The latter is likely to continue throughout 2021, driven in large part by an ongoing recovery in global trade.
Brent crude oil
The Brent oil price advanced to its highest level in thirteen months yesterday, amid optimism that a recovery in fuel demand will boost energy markets this year. At the close of local trade, benchmark Brent crude futures quoted 0.56 percent lower at $60.22pb. Crude dipped during Asian trade this morning.
BUSINESS REPORT
