South Africa’s rand climbs to 8 week high against dollar

South Africa’s rand raced to its highest in more than eight weeks against the U.S. dollar on Tuesday, as optimism about a global recovery from the COVID-19 pandemic boosted riskier assets, with investors looking past Sino-U.S. trade tensions.

At 0605 GMT, the rand traded at 17.4700 per dollar, 0.91 per cent firmer than its previous close.

The currency was at its strongest since March 27.

“The optimistic recovery narrative is holding within markets, keeping the dollar subdued and seeing the rand remain on a stable footing following last week’s rally,” Bianca Botes, executive director at Peregrine Treasury Solutions, said in a note.

“While there are looming geopolitical risks, it seems as though markets are currently pushing them onto the back burner, and will likely continue to do so until there is a new escalation or increased threat.”

Japan’s decision to end coronavirus-induced restrictions and a survey showing German business morale rebounded in May, lifted hopes of an economic recovery and helped offset a war of words between Beijing and Washington on trade, coronavirus and China’s proposals for stricter security laws in Hong Kong.

In South Africa, President Cyril Ramaphosa announced on Sunday a further easing of the country’s lockdown from June 1, allowing the vast majority of the economy to return to full capacity.

The government was due to give more details on Tuesday.