JOHANNESBURG (Reuters) – South Africa’s rand was smooth early on Friday in increasingly cautious trade ahead of next week’s budget speech, which is expected to report on the progress of the country’s economic recovery .
At 0645 GMT, the rand was 0.03% weaker at 14.5800 per dollar, almost unchanged from near-night, despite slipping in the green zone after disappointing earnings data recovered hopes. fast in the world’s major economy.
The rally of the rand in the first two months of 2021 to a high year has been largely driven by offshore events, with broad stimulus policies in the United States and other developed economies, as well as the rollout of COVID- vaccines. 19, driving global risk demand.
That optimism has waned in recent sessions with investors looking to retain profits and wait for the next catalyst. Locally, the budget speech to be delivered by Finance Minister Tito Mboweni on February 24 has led to further warnings.
“Ahead of South Africa’s budget speech, markets are optimistic about the outcome,” said Razia Khan, chief economist at Standard Charted.
Recent data on better-than-expected economic activity and revenue collection have emerged at the end of 2020, while a slowdown in COVID-19 infections and the spread of vaccines has lost sentiment.
“Markets expect the good news to continue. Downward revisions of previously described fiscal deficits are now expected to shape market consensus, ”she said.
Bonds were also lower, with the yield on the government’s 2030 case benchmark up 0.5 basis points to 8.770%.
Reciting with Mfuneko Toyana; Edited by Subhranshu Sahu