Rand recovers as budget fears ease

Johannesburg - The rand edged up in early trade on Friday as investors shrugged off their initial disappointment over Finance Minister Pravin Gordhan's Budget Speech and risk appetite returned to markets.

At 08:26, the rand had edged up by 0.18% to R15.5700/$, well off its rally to a two-month high below 15.20/$ on Tuesday.

The local currency sold off heavily on Wednesday, weakening by more than 3% as traders tried to make sense of Finance Minister Pravin Gordhan's disappointing budget speech.

"Although we have seen a sharp bounce from the 15.0650 lows this week, the underlying corrective rand mode is still in play," said Standard Bank trader Warrick Butler.

Sentiment was also boosted by some positive comments from China's central bank governor Zhou Xiaochuan at the G20 Summit, who said Beijing still has the room and tools to support the world's second-largest economy.

The risk-on environment also helped the rand correct itself lower.

"The global environment should be considered moderately rand positive. Risk assets have made moderate gains," said John Cairns, a currency strategist with Rand Merchant Bank.

Stocks opened firmer, with the JSE Top 40 blue-chip index up 1.4%.

Bonds were firmer, adding 4 basis points to 9.230%.