JOHANNESBURG (Reuters) -The South African rand held steady on Tuesday as global risk sentiment improved after tanking on Monday amid fears of a possible recession in the United States.
At 1435 GMT, the rand traded at 18.5200 against the dollar, near its previous close of 18.5225.
“The South African rand continues to face challenges today despite a slight improvement in market sentiment,” said Zain Vawda, market analyst at MarketPulse by OANDA.
“In the coming weeks, we might see range-bound trading as markets react to data releases and fluctuating recession concerns,” Vawda added.
Friday’s weak U.S. July payrolls report stoked recession worries on Monday and led to a plunge in global equities, with traders fleeing to safe havens.
U.S. central bank policymakers pushed back on Monday against the notion that the economy is close to recession, but indicated the Federal Reserve would need to cut rates to avoid such an outcome.
Like other risk-sensitive currencies, the rand often takes its cue from global drivers such as U.S. economic data and monetary policy in addition to local factors.
On the Johannesburg Stock Exchange, the blue-chip Top-40 index last traded about down 0.6%. South Africa’s benchmark 2030 government bond was slightly weaker, with the yield up 1.5 basis point to 9.375%.
(Reporting by Tannur AndersEditing by Christina Fincher and Gareth Jones)
