File image: IOL
JOHANNESBURG - The rand rallied in late trade yesterday after the government signalled it would give additional support to power firm Eskom and as emerging currencies were lifted by expectations the Federal Reserve could signal US rate cuts.

At 4pm the rand was 1.76percent firmer at R14.5475 to the dollar, after early in the day trading at around the R14.80 mark. It jumped late in the session as demand for emerging market assets was buoyed by the potential for policy easing by the US and EU central banks.

Yesterday the European Central Bank chief Mario Draghi said there would be more stimulus if inflation failed to pick up.

The rand tumbled to R15.1750 on June7, its worst level in 2019, following a 3.2percent contraction to economic growth in the first quarter and a row between the ANC and government officials over the central bank’s mandate.

News that President Cyril Ramaphosa would announce more measures to support cash-strapped power utility Eskom after meeting with the company’s board also aided the currency, traders said.

Bonds also jumped, with the yield on the benchmark 10-year government bond falling 11 basis point to 8.27percent, their lowest level since April 2018.

On the stock market, the benchmark JSE Top40 index advanced 0.82percent to 52593.97 points while the all share index rose 0.75percent to 58629.09 points, as retailers and banks were boosted by the firmer currency. 

Reuters