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(Updates rand, adds bonds, stocks)
JOHANNESBURG, May 20 (Reuters) - South Africa’s rand edged up on Wednesday as global risk appetite improved on hopes of an economic recovery, though investors remained cautious a day ahead of a central bank rate decision.
Stocks continued their upward trajectory, following other global markets on renewed optimism of economies opening up and increasing demand.
At 1500 GMT the rand was 2.15% firmer at 17.9510 per dollar, trading at its strongest levels since April 10.
“Markets are relatively at ease given the continuous stimulus in the EU and US to support their economies through the pandemic and the subsequent recession,” Bianca Botes, executive director at Peregrine Treasury Solutions, said in a note.
The rand’s strength mirrored gains in the euro, which climbed towards a two-week high as a Franco-German proposal for a common fund that could move Europe closer to a fiscal union boosted demand for the currency.
Back at home, investors were waiting for the South African Reserve Bank (SARB) interest rates decision on Thursday.
A Reuters poll of analysts forecast the SARB to cut rates by 50 basis points (bps) to 3.75%, but some see the possibility of a deeper, 100 bps cut. That’s on top of 225 bps-worth of rate reductions since March.
On the stock market, the benchmark FTSE/JSE all-share index was up 0.37% to end at 52,143 points, a 10-week high, while the top 40 companies index closed up 0.46% to 48,380.
Government bonds firmed, with the yield on the 10-year instrument due in 2030 falling 23 basis points to 8.98%. ($1 = 0.9098 euros) (Reporting by Mfuneko Toyana and Promit Mukherjee; Editing by Alex Richardson)
