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THE RAND extended a rally from the previous session yesterday, spurred by optimism about prospects for a Covid-19 vaccine and the re-opening of economies around the world.

The country’s stock market was also buoyant on the back of expectations for the vaccine which would ultimately enable economic activity to return to normal.

At 5pm, the rand bid at R18.22 to the dollar, 18 cents stronger than at the same time on Monday, holding at a four-session high reached the previous day in a strong day for emerging currencies after encouraging results from the trial of a vaccine for Covid-19.

“Growing optimism around a Covid-19 vaccine that is showing promising results helped to restore some positive market sentiment, while the Federal Reserve’s unwavering support for the US economy was also perceived as risk-on by the market,” said Bianca Botes of Peregrine Treasury Solutions.

“The rand continues to be driven by sentiment, which is essentially a balancing act as it switches between risk-on and risk-off as the pandemic unfolds,” Botes said in a note.

US biotech company Moderna’s experimental Covid-19 vaccine, the first to be tested in the US, produced protective antibodies in a small group of healthy volunteers, according to very early data.

The JSE shared the upbeat mood of the currency markets and showed modest gains in an extension of Monday’s rally.

The all share index rose 1.11 percent to 51950.14 points, while the Top40 index climbed 1.02 percent to 48160.65 points.

Bonds extended their rally, with the yield on the government issue due in 2030 down 38.5 basis points at 9.21 percent after falling 46.5 basis points in the previous session. I Reuters