Rand shows muscle after oversold levels of Brexit

Johannesburg - The rand clawed back further ground against the dollar on Wednesday, pulling back from recent oversold levels after a British vote to exit the European Union triggered a flight from risky assets.

Government bonds also firmed, and the yield for the 2026 benchmark instrument fell 12.5 basis points to 8.785%, its lowest in nearly 7 months.

By 07:14 GMT, stocks rose in early trade, with the benchmark Top-40 index rising 0.4% to 45 293 points while the broader All-share index was up 0.5% at 51 381 points.

The rand traded at 15.000 to the dollar, up more than 1 percent from Tuesday's close at 15.1825. It was also up 0.9% at 20.0655 versus the pound

The currency of Africa's most industrialised country has recovered nearly 4% against the dollar after plunging to a 3-1/2 week low of 15.6800 last Friday after Britons voted to leave the EU, triggered worldwide market turmoil.

"Global markets have stabilised and most risk assets are bouncing back," Rand Merchant Bank's currency analyst John Cairns said in a note.

"Sentiment over Brexit remains the key driver but attention is turning back towards the data."

South Africa's central bank Governor Lesetja Kganyago said late on Tuesday that Brexit would add further pressure to the already struggling economy, but would not cause a recession. South Africa has strong trade ties with Britain.