The rand firmed against the dollar early on Tuesday, in line with a rally in riskier currencies as China’s trade data painted a less gloomy picture of the economic fallout from the coronavirus pandemic than markets had feared.
At 0630 GMT, the rand traded at 18.06 per dollar, 0.2% firmer than its previous close.
China’s March exports fell 6.6% from a year earlier, compared with a forecast for a 14% drop and imports fell by less than 1%, compared with a 9.5% drop anticipated by economists.
Analysts, however, expect the rand to remain volatile, with a grim outlook for South Africa’s economy after the country imposed some of the toughest restrictions on the continent to curb the spread of the new coronavirus, including a 5-week lockdown to the end of April that has halted production.
“The world is still concerned about the impact of the Covid-19 outbreak on economic growth, with many countries still enduring some form of lockdown,” said Bianca Botes, executive director at Peregrine Treasury Solutions.
South Africa entered a recession in the final quarter of last year as power cuts by state utility Eskom took a toll on the economy.
Government bonds were weaker, with the yield on the 10-year instrument due in 2030 rising 14 basis points to 10.950%.