Cape Town – The rand, which traded as low as R12.52 to the dollar last week, clawed back some of lost ground to open at R12.32 to the greenback on Monday morning.
“The successful meeting between North and South Korea has been seen as a victory for the South, giving emerging markets across the board a useful boost,” said Bianca Botes of Peregrine Treasury Solutions in a note on Monday morning.
“[The meeting between the two Koreas] has wiped one of the geopolitical factors that called for emerging market sell-off clean off the board and emerging market currencies staged a bit of a fightback on Friday,” said Andre Botha, a senior currency dealer at TreasuryONE.
“The peace deal also impacted the US Treasury Yields as the US 10-year closed below the 3% level, which gave emerging market currencies further impetus to run lower.”
The local currency in coming off the back of a tough week, with a strong dollar and US bond yields pushing the local currency lower.
“Locally we have private sector and the trade balance coming out, with the later pencilled in at R3.7bn for March,” said Adam Phillips of Umkhulu Consulting. The SA Revenue Service will publish its trade statistics for March at around 14:00.
“However, how much activity [this sets off] locally depends on who is around today given that [Tuesday] is another public holiday,” he said.