South Africa’s rand, shares bounce from massive losses
South Africa’s rand firmed early on Thursday, bouncing from a decline to its lowest in nearly 11 months. This came after investors digested signs of global economic recession and looked to buy the currency at cheaper rates in anticipation of sharper falls.
The rand rose almost 1 percent at 15.2250 against the U.S. dollar after a fall of 15.4400 on Wednesday as risk-aversion was stoked by an inverted U.S. Treasury bond yield curve – widely viewed as a sign of looming global recession – for the first time since 2007.
Traders said the recovery was likely to be short-lived, given the domestic economic and political outlook after a contraction in GDP and continuing legal challenges against President Cyril Ramaphosa.
Equities also opened firmer, with the Johannesburg Stock Exchange’s (JSE) Top-40 index increasing nearly 0.5 percent, after plunging to a six-month trough in the previous session.
Bullion producer Gold Fields swung to a first-half profit as output grew after the inclusion of its joint venture with Asanko Gold, but headline earnings per share dropped, sending its share price down by 3 percent.
Bonds strengthened slightly, with the yield on the benchmark paper due in 2026 down 0.5 basis points to 8.465 percent.