South African rand rallies in risk-on trade


Updates throughout

JOHANNESBURG, Aug 24 (Reuters) - South Africa's rand rallied on Monday, helped by a risk-on mood on global markets after U.S. regulators approved a treatment for COVID-19 patients.

Markets latched onto the U.S. Food & Drug Administration's "emergency use authorisation" for the use of blood plasma from patients who have recovered from COVID-19 as a treatment for the disease.

That helped the rand gain roughly 1.1% to trade at 16.9500 against the dollar by 1516 GMT, continuing a recent pattern where the rand has moved mainly on shifts in global sentiment.

Annabel Bishop, an economist at Investec, said in a research note that the rand was being helped by a trend towards strength for emerging markets.

"Q3 has been underlaid with U.S. dollar weakness on a departure from safe-haven assets, as markets continue to price in recovery for the global economy, with traders fearful of missing out on this play," she wrote.

After no major domestic data releases last week, local traders await consumer price index figures on Wednesday and the producer price index on Thursday.

Also in focus is the Federal Reserve's annual Jackson Hole retreat, for clues on the outlook for U.S. monetary policy, a major determinant of risk appetite globally.

On the Johannesburg bourse, the Top-40 index .JTOPI rose 1.1% to 52,256 points, while the All-share index .JALSH gained 1.2% to 56,625 points.

Gains were partly driven by heavyweight Naspers NPNJn.J which rose 1.2% to 3,068 rand after an increase in WeChat parent Tencent 0700.HK, in which Naspers holds a more than 30% stake through its subsidiary Prosus NV PRX.AS.

"The biggest moves at the moment are the usual suspects, Naspers and Prosus, our two biggest companies. That's on the back of Tencent which went up about 4% in Hong Kong this morning," said Greg Davies, an equities trader at Cratos Capital.

In fixed income, the yield on the benchmark 2030 government bond ZAR2030= rose 5 basis points to 9.315%.

(Reporting by Alexander Winning and Tumelo Modiba; Editing by Giles Elgood)

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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