South Africa’s rand firmed on Wednesday against a softer dollar as increased optimism that China and the United States will reach a trade deal boosted sentiment for riskier assets.
At 0700 GMT, the rand traded at 13.9100 versus the greenback, 0.5 percent firmer than its previous close.
The rand’s gains were linked to growing optimism that the world’s two largest economies will strike a deal to avoid an all-out confrontation that would severely disrupt global trade.
Officials of the U.S. and China continued trade talks in Beijing for an unscheduled third day, amid signs of progress on issues including purchases of U.S. farm and energy commodities as well as increased access to China’s markets.
The rand is expected to trade in a range of 13.80 to 14.00 to the dollar today, NKC African Economics said in a note.
South African government bonds also firmed, with the yield on the benchmark instrument maturing in 2026 down 2 basis points to 8.800 percent.
Stocks opened higher with the Johannesburg Stock Exchange’s Top-40 index up 1.18 percent to 46,652 points.