JOHANNESBURG, Oct 20 (Reuters) - South Africa's rand firmed
on Tuesday, building on recent gains as investor demand for
high-yielding, riskier assets was spurred by signs the United
States would conclude a new stimulus package.
At 1600 GMT, the rand was 0.27% firmer at 16.4750
per dollar compared with an opening level of 16.5375. Trade was
subdued, reflecting the overall caution in markets ahead of U.S.
elections in November and concerns about a resurgence of
COVID-19 infections, especially in Europe.
The U.S. stimulus programme, which will add to the $3
trillion in coronavirus relief already approved this year, has
been key to market sentiment. Democrats and Republicans were
said to be close to agreeing a deal on Tuesday.
With no top-tier data due locally this week, and the medium
term budget set for next Wednesday, the rand continued to be
driven by global risk sentiment and investors search for high
South Africa's currency and bonds offer some of the highest
returns among emerging markets, and have remained attractive
despite mounting fiscal risks, with the economy in a
"The South African currency continued to benefit from
external factors, with attractive carry underpinning rand
strength despite a brittle economic backdrop. Global risk
appetite supported the local unit," said analysts at NKC African
In fixed income, the yield on the benchmark government bond
due in 2030 was flat at 9.3%.
Stocks rose slightly on hopes for the U.S. stimulus package.
The benchmark Top-40 index rose 0.22% to 50,852
points and the All-Share index closed 0.2% higher at
Shares in Pick n Pay rose 2.17% to 52.66 rand after
the supermarket chain declared a full-year dividend alongside an
Among the decliners, the gold sector fell 2.03%,
with Harmony Gold 1.97% weaker at 92.10 rand and
AngloGold Ashanti closing down 3.16% at 429.25 rand.
(Reporting by Mfuneko Toyana and Tanisha Heiberg; Editing by