Rand recovers further from oversold levels after Brexit

folarin okunola

June 30, 2016 12:18 AM

Stocks were also up by 0714 GMT, with the benchmark Top-40 index rising 0.4 percent to 45,293 points while the broader All-share index was up 0.5 percent at 51,381 points.

South African rand notes, file. REUTERS/Siphiwe Sibeko

South Africa's rand clawed back further ground against the dollar on Wednesday, pulling back from recent oversold levels after a British vote to exit the European Union triggered a flight from risky assets.

Government bonds also firmed, and the yield for the 2026 benchmark instrument fell 12.5 basis points to 8.785 percent, its lowest in nearly 7 months.

The rand traded at 15.000 to the dollar, up more than 1 percent from Tuesday's close at 15.1825. It was also up 0.9 percent at 20.0655 versus the pound

The currency of Africa's most industrialised country has recovered nearly 4 percent against the dollar after plunging to a 3-1/2 week low of 15.6800 last Friday after Britons voted to leave the EU, triggering worldwide market turmoil.

"Global markets have stabilised and most risk assets are bouncing back," Rand Merchant Bank's currency analyst John Cairns said in a note.

"Sentiment over Brexit remains the key driver but attention is turning back towards the data."

South Africa's central bank Governor Lesetja Kganyago said late on Tuesday that Brexit would add further pressure to the already struggling economy, but would not cause a recession. South Africa has strong trade ties with Britain.

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