South African rand pares early gains, technicals offer support

After an initial fall, the South African rand has rebounded. (Reuters pic)

JOHANNESBURG: South Africa’s rand was firmer in early trade on Wednesday in a technical rebound after slumping as much as 2% in the previous session to seven-month lows on jitters triggered by the escalating tit-for-tat US-China trade war.

At 8.50am local time, the rand was up 0.11%, paring earlier gains.

Technicals point to a rebound or at least support after the currency swung deeply into oversold levels, according to momentum indicators tracked by analysts.

But dollar strength or a return of rolling power cuts could cap gains, and the market will also be looking out for May CPI data due at 10am local time.

In fixed income, the yield for the benchmark government bond due in 2026 was down 1.5 basis points to 9.155%.

Stocks were also seen to be rebounding, partly on technical factors, with the JSE Top-40 futures index up almost 1.2%.