South Africa’s rand strengthened yesterday amid growing appetite for risk on hopes for progress in trade negotiations between China and the United States.
At 0700 GMT the rand was up 0.53 percent at 14.1350 per dollar compared with a close of 14.2100 in New York.
Demand for emerging-market currencies grew after the Financial Times reported China and the United States had resolved most of the issues standing in the way of a trade deal.
The rand had reached a six-week high of 14.0750 after Moody’s struck a surprisingly positive note in a credit opinion on Tuesday, following the agency’s decision on Friday to delay a review that might have removed South Africa’s last investment-grade rating.
The rand lost steam late in the session as concern resurfaces over Eskom, the struggling state power company.
“Although the rand posted additional gains after Moody’s comments, these were short-lived as comments from the African National Congress that it did not wish to see job losses at Eskom, despite previous comments to the contrary, saw the markets turn cautious,” analysts at Nedbank said in a note.