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After falling to a record low against the dollar earlier in the week, the rand strengthened to below R18 against the greenback last Thursday.

The local currency opened the day at 18,18/$ and firmed by just over 1 percent to trade at R17,85 after noon.

“The rally in riskier assets, including the rand, is attributed to renewed risk appetite, as markets are optimistic about the virus peaking in Europe and the US,” said Bianca Botes, Executive Director at Peregrine Treasury Solutions in a note.

Botes said focus was moving to “potential light at the end of the tunnel” and the assumption that once the virus peaks, the world may return to some version of normalcy. The spot dollar index — its value relative to a basket of six foreign currencies — also weakened marginally last Thursday, which also contribute to relative rand strength.

“The softer dollar is a result of this renewed optimism, as the dollar is used as a safe haven asset,” said Botes. —fin24.com