Rand holds firm amid Covid-19 economy woes

JOHANNESBURG (Reuters) – The South African rand steadied against the U.S. dollar on Monday as the spread of the coronavirus at home and around the world dampened optimism over a swift economic recovery.

At 1630 GMT, the rand traded at 17.2675 per dollar, little changed from its closing level on Friday.

“Rising global Covid-19 cases and the re-imposition of restrictions by certain states in the U.S. to stop the spread has seen the risk-off sentiment from Friday continue,” analysts at TreasuryOne said in a note.

“Investors are looking to safe-haven assets once more as talk of a double dip in the U.S. economy is doing the rounds.”

The death toll from COVID-19 reached half a million on Sunday, according to a Reuters tally, and several countries, including the United States, grappled with a resurgence in cases after relaxing measures to curb the pandemic.

South Africa reported 6,334 new cases on Sunday after 7,210 new cases the day before, among the steepest daily rises to date.

The coronavirus crisis is expected to take a heavy toll on Africa’s most industrialised economy, which is already in recession.

First-quarter gross domestic product data will be released on Tuesday. Current account and monthly budget data are also due to be published later in the week.

On the bourse, most tracked indices bucked a global trend of falling equities to start the week on a stronger note.

The FTSE/JSE benchmark All Share index was up 0.91% to end at 54,137 points while the top 40 companies index was up 0.92% at 49,935 points.

The yield on the 2030 government bond was flat at 9.185%.

(Reporting by Olivia Kumwenda-Mtambo and Promit Mukherjee; Editing by Jan Harvey)

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